G20 finance ministers and central bank governors said in a statement that they had already agreed on a set of indicative guidelines in past meetings that completed phase one of their work “to address persistently large imbalances. We now launch the second step of this process with an in-depth assessment of the nature of these imbalances and the root causes of impediments to adjustment. Based on this analysis, the IMF assessment on progress toward external sustainability, as well as the other aspects of our mutual assessment process, we will ascertain for our next meeting the corrective and preventive measures that will form the 2011 action plan…to be discussed by Leaders at the Cannes Summit.”
On Friday, April 15, Russian Finance Minister Alexei Kudrin, told a gathering of public officials and think tank economists at the Peterson Institute for International Economics in Washington that he did not know what the new mechanisms would be, or if there would be allowed sanctions as a tool in case countries broke those rules.“We need to speak more about economic trends within the world economy and the place of our national economies within the international economy. A top issue is hot money flows and what steps should be taken on speculative inflow of capital into their countries. In the future, the IMF will regulate this issue,” Kudrin said.
Officials at the G20 meeting this weekend agreed on the need to strengthen the effectiveness and coherence of bilateral and multilateral IMF surveillance, particularly on financial sector coverage, fiscal, monetary and exchange rate policies.Regarding the dollar and euro as global reserve currencies, Kudrin said prior to his attending the IMF and G20 meetings that he does not see any other currency or basket of currencies taking the dollar and euro out of their pole position as the world’s most important reserve and international trade currencies.
