UPDATE 1-Canada says emerging-market volatility on G20 agenda
By Randall Palmer
OTTAWA Aug 30 (Reuters) - Next week's Group of 20 summit will discuss the volatility in emerging markets that erupted after the U.S. Federal Reserve started to talk about scaling back its massive bond-buying program, Canadian officials said on Friday, but they suggested the Fed's move was not the only reason for the turbulence.
A senior official, briefing reporters on condition of anonymity, said the summit in Russia of the G20 leading economies will take time to examine the reasons for the market volatility in India and other countries.
He said there were several factors involved, among them improving private-sector demand in the United States that is encouraging the Fed pullback, which he said is a good-news story that creates challenges in other parts of the world.
"But some of these challenges also reflect the state of their own economies," he said.
India is so concerned about the market tumult that it is seeking support from other emerging countries for coordinated intervention in foreign exchange markets. India's currency has fallen by 20 percent against the U.S. dollar since May.
A Canadian official who was willing to be named, Andrew MacDougall, spokesman for Prime Minister Stephen Harper, noted an irony in the criticism of the Fed's move to reduce its bond-buying program, known as quantitative easing.
"We've kind of heard the opposite complaint when quantitative easing was happening, that that was disrupting flows as well, and now that they're moving in the other direction, that causes a different set of challenges," he said. Continued...