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G20 vows to calibrate pace of interest rate hikes, avoid spillovers

Published 11/16/2022, 01:26 AM
Updated 11/16/2022, 01:40 AM
© Reuters

© Reuters

NUSA DUA, Indonesia (Reuters) -Leaders of the Group of 20 (G2) major economies said on Wednesday their central banks will continue to calibrate the pace of monetary policy tightening, while being mindful of the need to limit "cross-country spillovers."

In a leaders' declaration, the G20 members also reaffirmed their commitment to avoid excessive exchange-rate volatility while recognising that "many currencies have moved significantly" this year.

"G20 central banks ... are closely monitoring the impact of price pressures on inflation expectations and will continue to appropriately calibrate the pace of monetary policy tightening in a data-dependent and clearly communicated manner," the statement said.

© Reuters. (Front L-R) World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus, European Commission President Ursula von der Leyen, US President Joe Biden, Indonesian President Joko Widodo, Australian Prime Minister Anthony Albanese, Organisation for Economic Co-operation and Development (OECD) Secretary-General Mathias Cormann  and Italian Prime Minister Giorgia Meloni  attend a mangrove planting event at the Tahura Ngurah Rai Mangrove Forest Park as part of the G20 Leaders' Summit in Denpasar, Indonesia, 16 November 2022. The 17th Group of Twenty (G20) Heads of State and Government Summit runs from 15 to 16 November 2022. MAST IRHAM /Pool via REUTERS

The central banks will also be mindful of the need to limit spillovers, it added in a nod to concern among emerging economies over the impact aggressive U.S. rate hikes could have on their markets.

"Central bank independence is crucial to achieving these goals and buttressing monetary policy credibility," it said.

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