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Russia: Don't compete through currency devaluations

As Russia attempts to move away from currency manipulation, the country's finance minister has some harsh advice for other nations looking to stimulate their economies.

Russia currency devaluation 2142013Enlarge
Russia's former President Dmitry Medvedev (R) welcomes acting Finance Minister Anton Siluanov (L) during a meeting on Sept. 28, 2011. Siluanov made headlines recently for his criticism of countries that are trying to stimulate their economies through currency devaluation. (Mikhail Klimentyev/AFP/Getty Images)

Russia fueled the G-20 currency war debate on Thursday, when the Russian finance minister criticized countries that are trying to stimulate their economies through currency devaluation.

"We believe countries should not be competing through their currency policies. They should be competing based on their economic activity," Finance Minister Anton Siluanov told CNBC at the G-20 meeting of major economic powers in Moscow.

Currency war fears have grown this year, spurred by aggressive monetary policy moves by Japan's new government, which have caused the value of the yen to plummet.

Siluanov agreed when asked by CNBC if Japan was deliberately devaluing its currency.

"You are absolutely right," he said.

"At the previous G-10 meeting, we were discussing the so-called currency war, and it is a unanimous opinion that such moves and operations are not admissible for waging this war."

The G-7 nations issued a statement on Tuesday that countries should not implement policies aimed at devaluing their currency. The yen initially weakened after the Japanese finance minister, Taro Aso, said the statement recognized Japan's reflationary policies were not done with this intention.

(Read More: Currency wars or just currency confusion?)

Russia's deputy finance minister, Alexei Moiseev, said on Wednesday that his country was "actively" moving away from currency manipulation.

"Last fall, the central bank officially declared that Russia was moving towards a flexible exchange rate, so we have a target of 2015 to commit to make no interventions in the exchange market," Moiseev told CNBC.

(For another view on the currency debate, see There are no currency wars)

Siluanov added on Thursday that he wants Russia to become a global financial hub to rival London, New York and Tokyo.

"This is a very serious goal," he said.

(Read More: $2 Trillion economy with a major investor trust problem)

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Original Source URL: 
http://www.cnbc.com/id/100459857

http://www.globalpost.com/dispatch/news/regions/europe/russia/130214/russia-monetary-policy-G20-global-economy-world-leaders