G20 Deputies Meeting This Weekend in Korea

A post by Marc Chandler, head of Brown Brother Harriman’s Currency Strategy Team. For BBH’s currency views, visit the website here.

The G20 meet this weekend and it has drawn little attention thus far.  South Korea heads up the G20 this year and this meeting of deputy finance ministers and deputy central bankers will be held in Incheon, South Korea Feb 27-28.  This is the first G20 meeting of the year.  The IMF and World Bank will also be represented.  The foreign exchange market itself does not appear to be very salient to policy makers at the moment, outside of the obvious desire on the part of the US and Europe especially for Chinese yuan appreciation.

The real focus is elsewhere.  Three issues are reportedly on the top of the agenda.  Exit strategies, framework for sustainable and balanced growth, and restructuring the governance of the IMF and World Bank.

However, this seem largely puff stuff, which might explain why the G20 meeting is not on the market’s radar screen.   What does international cooperation on exit strategies really mean? What would it look like?  Who doesn’t want a framework for sustainable and balanced growth?  Is there really one that is broadly applicable?

It tells you much about the agenda that the most promising topic looks like the restructuring of the governance of the IMF and World Bank.  There has been some suggestion to graft the G20 in some fashion.  Chinese officials are gradually getting some senior positions in these multilateral lenders.   Developments on this front are not market movers.

The G20 heads of state meet in June in Canada.  This week’s G20 meeting is important because it will help set the agenda for that meeting.

Bottom Line:  The G20 meeting is not a risk event.  It is unlikely to produce a joint statement.  But there could be important useful information about issues and countries’ positions.

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