US Secretary of the Treasury Steven Mnuchin on Friday landed in Buenos Aires for the G20 Finance Ministers’ Meeting with the risk of a currency war in the air. He left two days later with the world’s finance ministers feeling much more at ease.
Over about 48 hours, Mnuchin tamped down concern of any shift in currency policy, hammering home at a news conference early on Saturday that the US’ longstanding commitment to a strong greenback remains intact.
He also said the US is not trying to intervene in the US dollar market.
His comments at the summit followed tweets on Friday from US President Donald Trump, who accused China and the eurozone of manipulating their currencies while complaining that a rising dollar is hurting the US.
His comments caused the greenback on Friday to weaken the most in four months as investors feared that Trump was embarking on a new era of jawboning the currency to boost exports.
However, by the end of the G20 meetings, few central bankers or finance ministers were talking about a potential currency war in which nations compete to devalue their exchange rates.
“We didn’t discuss the topic,” Spanish Minister of Economy and Enterprise Nadia Calvino told reporters on Sunday afternoon.
Participants instead focused much of their attention on a global trade conflict, as tit-for-tat tariffs between the US and its partners threaten to undermine business confidence, disrupt global supply chains and elevate consumer prices.
IMF managing director Christine Lagarde also raised alarm about the disputes, urging G20 nations to resolve disagreements via international cooperation.
The countries published a final communique at the close of the summit warning that risks to the world economy have increased amid heightened trade tensions.
After more than a dozen bilateral meetings, plenary sessions and a working dinner at a local steak house, Mnuchin said that it had been simple to reach agreement on the group’s final statement.
“It was the easiest communique — it was finished yesterday,” he said on Sunday.
Despite his diplomacy on the currency front, Mnuchin did not soften the US administration’s stance on trade and its tough rhetoric against Beijing.
As part of its push to rebalance world trade in the US’ favor, the White House has slapped tariffs on global steel and aluminum imports, as well as US$34 billion of Chinese goods.
Mnuchin on Saturday told reporters that the White House would continue to pressure countries to open their markets to US exports and investments, and questioned whether the yuan’s decline was the result of market forces or government interference.
Mnuchin said the US would closely monitor China’s exchange rate, which has fallen more than any major currency over the past month.
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