CHENGDU, CHINA – The Group of 20 finance chiefs vowed Sunday to use “all policy tools” to pursue growth as Britain’s decision last month to leave the European Union adds to the uncertainty in the global economy amid terrorism and other challenges.
Finance ministers and central bank chiefs from G-20 major economies, including Finance Minister Taro Aso and Bank of Japan Gov. Haruhiko Kuroda, condemned recent terrorist attacks “in the strongest possible terms” and agreed to contain all forms of terrorism financing, according to a communique released after the meeting in southwest China.
On the exchange market, the G-20 reaffirmed previous commitments to refrain from competitive devaluations, while reiterating that excess volatility and disorderly moves in exchange rates can have adverse effects for economic and financial stability.
Referring to the recent depreciation of the Chinese yuan, Aso said neither a sharp decline nor appreciation of the currency is desirable.
“One-sided depreciation of the yuan would not be necessarily economically favorable for China as well,” Aso told a press conference later in the day, calling on the Chinese government to take appropriate steps to stem possible adverse effects.
The two-day session, which started Saturday, comes ahead of a summit of the G-20 leaders this fall.
On Sunday, the finance chiefs said the economy continues to recover but growth “remains weaker than desirable” due to higher financial volatility and to geopolitical conflicts, terrorism and refugee flows that continue to complicate the economic environment.
To achieve strong, sustainable, balanced and inclusive growth, “We reiterate our determination to use all policy tools — monetary, fiscal and structural — individually and collectively,” it said.
The meeting was the first G-20 financial gathering since Britain voted in late June to leave the European Union. In the statement, the G-20 warned that the outcome of the British referendum “adds to the uncertainty in the global economy.”
“Members of the G-20 are well positioned to proactively address the potential economic and financial consequences” stemming from the referendum, the communique said, adding that they hope to see Britain as “a close partner” of the European Union in the future.
The meeting came amid a growing protectionist atmosphere in the United States and other parts of the world, with U.S. Republican presidential nominee Donald Trump threatening to pull the United States out of the Trans-Pacific Partnership free trade deal that includes 11 other Pacific Rim economies, including Japan.
In addressing such anti-globalism sentiment, the G-20 economies pledged to “resist all forms of protectionism” and said that “the benefits of growth need to be shared more broadly within and among countries to promote inclusiveness.”
As for the currency market, the G-20 reaffirmed previous commitments to refrain from competitive devaluations, while repeating that excess volatility and disorderly moves in exchange rates can have adverse effects for economic and financial stability.
Before the meeting Saturday, Kuroda told reporters the central bank “will take additional monetary easing measures if needed,” as the BOJ will hold a policy meeting this week.
In making a decision on whether to employ further steps, Kuroda said the central bank’s policy board will take into account the stimulus package planned by the government.
On the sidelines of the gathering, Aso met with Britain’s Chancellor of the Exchequer (finance minister) Philip Hammond and exchanged views over the impact of the British exit referendum and any possible paths the country might take after voting to leave the EU.