Brussels, 23/09/2005 (Agence Europe) - The meeting of finance ministers and central bankers of the world's seven richest (most industrialised) countries, the G7, in Washington on Friday afternoon, focussed on the hike in oil prices. The G7's final declaration is expected to welcome OPEC's decision to release a further 2 million barrels of oil a day. Like the ECOFIN Council (EUROPE 9025), the G7 is expected to highlight the importance of increasing long-term refining capacity. The Washington meeting also discussed the need for greater market transparency, energy savings and greater coordination at international level to deal with the oil price rises.
It looked unlikely on Friday evening that the G7 talks on exchange rates would make changes to the Boca Raton declaration of February 2004 stressing greater flexibility in exchange rates was desirable for all countries and economic areas lacking such flexibility to promote ordered and balanced adjustment of the international financial system based on market mechanisms. The meeting may cautiously welcome China's re-evaluation of the yuan in July, but is expected to see this as a first stage in the necessary greater reforms and therefore call for an 'orderly appreciation' of Asian currencies. Just before the G7 meeting on Friday, the Chinese central bank announced a slight new adjustment in its exchange system, enlarging the yuan's daily fluctuation range from 1.5% to 3%, without changing the 3% fluctuation range for the yuan/dollar exchange rate. Reuters reports the UK's Chancellor of the Exchequer, Gordon Brown, President of the ECOFIN Council, commenting before the G7 meeting he was chairing (the UK currently holds Presidency of both the EU and the G7) that China has made progress in moving towards a more flexible exchange rate system.
On Friday, the G7 ministers were joined by the finance ministers and governors of the central banks of Russia, China, India, Brazil and South Africa for a working dinner.
The traditional AGMs of both the International Monetary Fund and the World Bank will be hosted in Washington on Saturday and Sunday.