UPDATE 1-S.Africa’s Gordhan echos world "currency war" warning

* Gordhan: Currency war looms unless rich states give ground

* Currency tensions high ahead of G20 meetings

* S.Africa’s rand trading at 33-month high

(Updates with background, details, currency latest)

CAPE TOWN, Oct 14 (BestGrowthStock) – South African Finance Minister
Pravin Gordhan said on Thursday the world was heading towards a
“currency war” unless developed nations gave ground in
negotiations at the Group of 20 (G20).

“Unless the G20 takes on the responsibility of getting major
players to sit around the table to find a spirit of cooperation
and generosity and give-and-take … we are heading for what Mr
Mantega, the finance minister of Brazil, correctly called a
currency war,” Gordhan told a parliament finance committee.

Last month Brazilian Finance Minister Guido Mantega said the
world was in an “international currency war” as governments
manipulate their currencies to improve their export
competitiveness. [ID:nN27256208]

G20 finance ministers meet in Seoul next week ahead of a
summit on Nov. 11-12 to try to reconcile differences over deep
imbalances in the global economy and reduce the risk of such a
currency conflict.

“There are a set of global structural problems, if you like,
that we are walking into that we will have give serious
attention to in the next few weeks,” Gordhan said.

“A few weeks later the G20 leaders meet in Seoul and by that
time we’ve got to find answers to that question.”

Global currency strains are festering as financial markets
factor in the prospect of the U.S. Federal Reserve printing more
money to support a faltering domestic recovery.

Capital has flowed to emerging markets in search of higher
yields, leading to a strengthening of their currencies that is
threatening their economic growth.

“Exchange rate appreciation as capital flows from low-growth
developed countries to emerging markets with higher returns
reduces competitiveness and poses a risk to balanced growth,”
Gordhan said.

Some emerging markets such as Thailand and Brazil have
introduced a tax on capital flows to stem the flood of foreign
money.

In South Africa that idea did not get support at a major
policy meeting of the ruling African National Congress in
September.

South African Reserve Bank Governor Gill Marcus said late on
Wednesday the flood of money could be a long-term phenomenon.
[ID:nLDE69D08C] [ID:LDE69C2E9]

The rand (ZAR=D3: ), the currency of Africa’s biggest economy,
has gained 29 percent against the dollar since the beginning of
last year, weighing on exports and wider economic growth.

It hit a new 33-month high of 6.7620 against the dollar on
Thursday, and was last trading at 6.775.
(Reporting by Wendell Roelf, Writing by Phumza Macanda)

UPDATE 1-S.Africa’s Gordhan echos world "currency war" warning