A promise by Group of 20 nations to avoid a currency war is an important step but it is unclear whether it will lead to a change in their policies, Mexican Deputy Finance Minister Fernando Aportela said on Saturday.
At a meeting in Moscow, G20 finance ministers and central bankers pledged to refrain from competitive devaluations and said monetary policy would be directed only at spurring price stability and growth, wording very close to a statement by Group of Seven rich countries earlier in the week.
"It was very clear that embarking on competitive devaluations is not something which is sustainable," Aportela said in a telephone interview from Moscow following the meeting. "That promise, coupled with the G7 promise, is very significant."
Monetary easing by developed nations, including Japan and the United States, has helped economic growth but also unleashed destabilizing capital flows into emerging markets, including Mexico, where foreign holdings of government debt are at record highs.
Capital inflows tend to push up the exchange rate of recipient countries, making exports less competitive. China said at the meeting in Moscow that developed nations should take note of "spillover" effects.
Aportela said it was hard to say whether developed countries would actually change their policies as a result of the G20 promise.
"It's difficult to make a forecast," he said.
G20 countries also deferred setting new fiscal targets to replace those agreed in Toronto in 2010, which will expire this year. Aportela said he hoped G20 leaders would agree on new debt and deficit goals at their summit in St. Petersburg.
(Reporting by Krista Hughes; Editing by Paul Simao)