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G-20 accord to help ease currency volatility: BOK chief
SEOUL, Oct. 29 (Yonhap) -- Foreign exchange rate volatility is expected to ease following a recent agreement by the Group of 20 leading economies to avoid competitive currency devaluation, South Korea's top central banker said Friday.

   Finance ministers and central bank governors from the G-20 agreed during the weekend to refrain from competitively weakening their currencies and to move toward a market-determined foreign exchange rate system.

   "At the upcoming Seoul summit of the G-20, (political leaders) are expected to discuss macro-prudential measures to stem volatile capital flows," Bank of Korea (BOK) Gov. Kim Choong-soo told a business forum. The G-20 summit is slated for Nov. 11-12.

   "Given excessive capital flows have amplified currency volatility, this kind of discussion is expected to stabilize foreign exchange rates. This will have positive impacts on trade," he said.

   The Korean won rose more than 5 percent to the dollar in September alone amid competitive moves by major economies to drive down the value of their currencies in order to boost exports.

   Ultra-low interest rates in advanced economies and prospects for additional quantitative easing by the U.S. Federal Reserve have been prompting investors to snap up emerging markets' assets. A sudden reversal of capital flows is feared to increase instability in the financial markets as seen in the global financial meltdown.

   Kim added South Korea may not need to act to adjust exports and imports even if indicative guidelines for setting the numerical target for the current account are drawn up down the road.

   Finance chiefs of the G-20 agreed to maintain the size of the current account surplus or deficit at sustainable levels in a bid to address global imbalances.

   sooyeon@yna.co.kr
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