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G-20 Meeting in Sydney

Today marks the first day of G-20 meeting in Sydney to discuss monetary policy, specifically tapering by the Federal Reserve. In days leading up to the meeting the Fed has faced substantial criticism by emerging markets, like India, that have claimed that as the Fed eases buying bonds emerging market currencies and stocks have lost value.

In a press conference in Tokyo yesterday Japanese Finance Minister Taro Aso discussed some of the issues emerging markets face,

 “For emerging nations, they have faced weaker currencies, and sudden capital outflows due to their short-term funding,”  said today at a press conference in Tokyo. “It is important that emerging nations make efforts themselves to fix these issues” like high inflation and current account deficits, he said.

The meeting in Sydney will look at solutions to the problems emerging markets face in regard to Fed policy. In addition to a call for emerging markets to better insulate themselves from the U.S. monetary policy the meeting will also analyze increasing communication between central banks so policies between countries can be coordinated to improve their effectiveness. Still there is disagreement as to the extent of the the tapering’s responsibility for the turmoil in emerging markets with the World Bank claiming that the timing may be more coincidental than causal.


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  1. dillard dillard

    I believe that further teansparency regarding central banks and efforts to increase communications can be a strong decision to increase effectiveness of the banks and economic prosperity as a whole. With rising interest rates ensuing and efforts to curb bailouts other currencies have been negatively affected but this is an unfortunate externality which must come about. If we continue to keep interest rates low we risk hurting our ecomony and keeping it artificially low. Foreign countries need to fix their inflation rates, and this same Monetary transformation in the U.S. could help engender changes which need to happen outside the United States

  2. gjeong gjeong

    It sounds like the Fed cannot control its own policies now. Even it can, it will be faced by criticism by other countries. This means it will be under pressure that it now has to consider how its policies will affect the globe (not only the U.S.) It will be interesting to see what results this G-20 meeting will accomplish.

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