UPDATE 2-Russia echoes China, says U.S. should consult G20

* Russia says wants U.S. to coordinate with G20

* Kremlin against numerical current account targets

* Says not vulnerable to excessive capital flows for now

(Adds further comment, details)

By Gleb Bryanski

MOSCOW, Nov 8 (BestGrowthStock) – Russia sided with China ahead of
the Group of 20 summit, saying on Monday the United States
should consult other countries before pumping cash into its
economy, but stopped short of calling the policy a mistake.

President Dmitry Medvedev will take part in the summit,
where conflict is brewing over the U.S. Federal Reserve’s latest
allocation of $600 billion to buy Treasury bonds — money that
investors are likely to redirect into emerging markets in search
of higher returns, potentially fuelling new asset bubbles.

“Russia’s President (Dmitry Medvedev) will insist …. that
such actions are taken with preliminary consultations with other
members of (the Group of 20 countries),” said Russian G20
negotiator Arkady Dvorkovich.

China has been particularly vocal in criticism of the
policy, which U.S. President Barack Obama defended on Monday
during a trip to India, saying the Fed’s mandate to grow the
U.S. economy was good for the world as a whole.

Dvorkovich said that the Fed’s policy was an internal matter
but added that previous decisions by the G20 require
consultations on such issues. He said the Fed’s move may even
benefit Russia because its current capital inflows were too
small.

“Capital inflow for Russia now is a plus. It may not be a
plus for other emerging countries such as Brazil or China where
economies are overheated. Our economy is not overheated,”
Dvorkovich said.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For G20 PDF of analysis, commentary, scenarios, videos and
graphics, click on: http://r.reuters.com/jux34q

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

NO LESS DANGEROUS

Dvorkovich also said that Russia does not support the idea
of establishing numerical target limits for current account
balances, proposed by U.S. Treasury Secretary Timothy Geithner
when the G20 finance ministers met last month.

“We’re against such a simplified approach; it can create
other imbalances, no less dangerous,” Dvorkovich told a news
conference. “A system of criteria is possible, one criterion
cannot work.”

Dvorkovich said Russia was not “fully satisfied” with the
reform of the International Monetary Fund (IMF) agreed by G20
finance ministers, suggesting that emerging economies will push
for more voting rights in the near future.

Dvorkovich said the results of U.S. congressional elections
in which Democrats suffered heavy losses will not slow down the
“reset” policy between the two countries. Medvedev is due to
meet U.S. President Barack Obama this week.

Dvorkovich said the United States and other developed
nations should open up their economies to investment from
developing countries. He added that such investment can offset
“hot” money flows resulting from the Fed’s policy.
“Now everyone is scared that this $600 billion will flow
into emerging markets but a counterflow can have a stabilising
effect,” Dvorkovich said. “Everyone wants to invest in the U.S.
economy, it is not so bad.”
(For other stories on G20, click on [ID:nTOE69K01G]

(Editing by Ruth Pitchford)

UPDATE 2-Russia echoes China, says U.S. should consult G20