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US urges G20 to avoid competitive forex devaluation

The United States on Monday called on the Group of 20 economic powers, which holds a meeting later this week, to avoid competitive devaluation of their currencies that would threaten economic growth.

"To ensure growth strategies in the world's largest economies are mutually compatible and promote global growth the G20 needs to deliver on the commitment to move to market-determined exchange rates and refrain from competitive devaluation," said Lael Brainard, the Treasury under secretary for international affairs.

Brainard, who will lead the US delegation to the Moscow G20 finance chiefs meeting that opens Friday, noted global growth was weak and one-third of the G20 advanced and emerging-market economies, which represent almost 90 percent of the global economy, were in recession.

Strengthening demand will require greater progress on global rebalancing, she said, noting that for the adjustment process to work, exchange rates must be allowed to reflect market forces.

Brainard acknowledged that the G20 has to a better job in balancing medium-term fiscal consolidation with the need to support near-term growth.

"We need to do more to get people back to work."