G20: Monetary policy alone cannot lead to balanced growth

By FXStreet FXStreet (Bali) – Financial leaders at the G20 summit shared a common view this weekend about the urgency to intensify reform efforts in order to revert the slow growth cycle seen globally, noting that record’low interest rates alone will not be enough to overcome today’s growth challenges, while at the same time, there was a commitment to “refrain from competitive devaluations”

While there was a recognition that growth has fallen well short of expectations globally, there was also some degree of confidence that in some developed economies – read US – , where growth has been more encouraging, interest rates will have to rise sooner or later.

G20 communique: monetary policy alone cannot lead to balanced growth

The communique of the G20 finance ministers and central bankers read: “Monetary policies will continue to support economic activity consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth. We note that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies.”

“We will carefully calibrate and clearly communicate our actions, especially against the backdrop of major monetary and other policy decisions, to minimise negative spillovers, mitigate uncertainty and promote transparency”, the G20 concluded.

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Source:: FX Street