The threat posed by so called ‘currency wars’ is “overblown” according to the head of the International Monetary Fund.
Christine Lagarde has played down fears that rival economies are attempting to gain an unfair advantage through currency devaluations.
Speaking following a meeting of G-20 finance ministers and central bankers in Moscow, Ms Lagarde insisted there has “been no major deviation from fair value in the relevant currencies".
The group of leading industrial and devloping nations pledged not to artifically weaken their currencies.
“We think that talk of currency wars is overblown,” Ms Lagarde said. “People did talk about their currency worries. The good news is that the G-20 responded with cooperation rather than conflict today.”
Last week, the G7 the United States, Japan, Germany, Britain, France, Canada and Italy issued a joint statement warning against using domestic policy to target currencies.
Ms Lagarde said: “I welcome G-20 resolve to achieve a lasting reduction in global imbalances through joint actions to avoid persistent exchange rate misalignments, and the group’s commitment to refrain from competitive devaluation, to resist protectionism in all forms, and to keep markets open.”
The IMF chief added that “global growth is still weak, with unemployment remaining unacceptably high in many countries”.
“The weak global performance derives from policy uncertainty, private deleveraging, continued fiscal drag, as well as insufficient progress on rebalancing global demand.”
Finance ministers at the meeting in Russia were also updated by Mark Carney, the chair of the Financial Stability Board and future Bank of England governor, on the international body’s progress in implementing reforms to prevent a repeat of the global financial crisis.
The FSB said it is focusing on reform of derivatives trading, strengthening oversight of unregulated financial instititions (so called shadow banking) and ending the culture of institutions deemed "too big to fail".