UPDATE 1-G20 should refrain using FX for trade gains-Geithner

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GYEONGJU, South Korea, Oct 22 (BestGrowthStock) – Group of 20 nations
should refrain from currency policies aimed at gaining a
competitive edge, U.S. Treasury Secretary Timothy Geithner said
in a letter to G20 finance chiefs.

Geithner also said that nations with undervalued currencies
should neither try to weaken them or stand in the way of gains
and G20 members should aim to reduce their current account
imbalances below specified percentage of gross domestic product,
according to a letter obtained by Reuters on Friday.

“G-20 emerging market countries with significantly
undervalued currencies and adequate precautionary reserves need
to allow their exchange rates to adjust fully over time to levels
consistent with economic fundamentals,” Geithner wrote.

G20 finance officials started their formal two days of
meetings on Friday with nations from the developing world and
Japan dismissing the U.S. proposal to set a target of 4 percent
of gross domestic product for current account surpluses and
deficits, a measure that appeared aimed at China’s trade surplus.

China, Russia, Germany and Saudi Arabia are all running trade
surpluses above the mooted threshold while the United States is
running a deficit of around 3 percent of GDP.

A senior G20 official however put the chances for an
agreement on current account targeting at even. [ID:nASF000020]
(Reporting by Gernot Heller; Editing by Ed Lane and Tomasz
Janowski)

UPDATE 1-G20 should refrain using FX for trade gains-Geithner