UPDATE 1-Canada pushes G20 for more forex flexibility

* Canada wants progress on currencies, current accounts

* Says China currency moves should be gradual, not sharp

OTTAWA, Nov 5 (BestGrowthStock) – Canada wants a G20 summit next
week to make more progress on the sensitive questions of
currency flexibility and current account balances, a senior
government official said on Friday.

Leaders of the Group of 20 rich and emerging nations will
hold a summit in South Korea next week amid increasing tensions
over foreign exchange rates and fears that a so-called currency
war could break out.

Developed countries are upset with China’s policy of
keeping its yuan artificially low and want Beijing to let it
float higher.

And, in recent days, some G20 members criticized the United
States for driving down the value of its dollar by announcing a
plan to pump more cash into the sluggish economy.

“Canada fundamentally is looking for more progress on the
whole question of currencies,” the official told a briefing.

Canada also wants the G20 to agree to targets for current
account imbalances as a central part of an action plan due to
be adopted in Seoul next week.

“We fully support the adoption of a current account
target,” an official said, but did not give a specific number.

Prime Minister Stephen Harper has sent a letter to his G20
counterparts about “the role played by the persistence of large
and unsustainable current account imbalances in deficit and
surplus countries”, said spokesman Dimitri Soudas.

“In Seoul, we should have a frank discussion on how to
narrow these imbalances and facilitate the required rotation in
global demand,” he quoted the letter as saying.

The officials said the tensions over currencies showed the
importance of the G20, an organization that some critics says
is too large and divided to work effectively.

“Canada’s top priority at the Seoul summit will be to
secure agreement on an action plan … (which) in the short
term encourages greater exchange rate flexibility,” said
Soudas. Another official said Canada did not want large and
potentially disruptive moves in the yuan.

“We think in the Chinese context — domestic as well as
international — that a sustained modest appreciation of their
exchange rate is in both their interest and in ours,” he said.
(Reporting by David Ljunggren and Louise Egan)

UPDATE 1-Canada pushes G20 for more forex flexibility