India to raise Chinese currency devaluation in G-20

India will raise the recent currency devaluations by the Chinese central bank and its ramifications to the global economy in the upcoming in G-20 meet in Turkey.

"The recent devaluation of major currencies followed by currency depreciations in a large number of Asian emerging markets raise the risk of competitive devaluations. Competitive currency devaluations, at a time when global demand is sluggish, is a major threat to stability in the global economy," an official statement from the finance ministry said.

The statement comes on the eve of Finance Minister Arun Jaitley leaving for a two-day conference of G-20 finance ministers and central bank governors, who will take stock of the global economic situation and review the member nations' growth strategies.

The meeting will be held in Ankara, Turkey, on September 4 and 5. Reserve Bank of India Governor Raghuram Rajan will also participate in the meet.

"The attempt in Ankara would be to analyse the situation and consider collaborative measures like developing the global safety nets to protect countries from negative spill-overs arising from domestic actions," the release said. The finance minister will also hold meetings with his counterparts from G-20 countries on the sidelines of the meet. Other members of the grouping include Argentina, Brazil, China, France, Germany, Italy, Japan, Russia, South Africa, Turkey, the UK, the US and the European Union.

"The main purpose of these meetings is to review ongoing global economic developments, growth prospects, investment and infrastructure, international financial architecture and international tax issues among others," the release said.

The recent devaluation of Chinese currency yuan has triggered a global financial turmoil hurting stock and currency markets worldwide.

Jaitley will also participate in the joint meeting of G-20 finance and labour ministers as well as in the first meeting of the governing council of BRICS Contingent Reserve Arrangement (CRA). Ahead of the ministerial meeting, G-20 labour ministers are meeting in Ankara on Friday to discuss growth and employment issues.

India is represented at that meeting by Labour Minister Bandaru Dattatreya. The meet will discuss strategies to deliver more and better jobs and policies to reduce inequalities to support inclusive growth.

"The joint meeting of G-20 finance and labour ministers will address issues of employment and growth, inequalities, declining ratio of labour income in GDP, youth unemployment and skilled labour mobility," the release said.

Finance ministers of G-20 countries will also review the progress on the G-20/OECD high level principles on SME financing and the establishment of the private sector-led World SME Forum, a new initiative to serve as a global body to drive the contributions of SMEs to growth and employment, it said.

The BRICS Contingent Reserve Arrangement (CRA) has been conceived as an additional safety net by the BRICS nations to meet the short-term liquidity needs that might arise in the face of volatile capital flows. The total corpus of CRA is $100 billion.


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