UPDATE 3-G7 expected to issue statement to cool currency rhetoric

Mon Feb 11, 2013 5:43pm EST
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* Officials say G7 currency statement expected this week

* To reaffirm commitment to "market-determined" FX rates

* U.S., Europeans concerned about Japanese statements on yen

Feb 11 (Reuters) - The Group of Seven nations are considering a statement this week reaffirming their commitment to "market-determined" exchange rates in response to heating rhetoric about a currency war, G20 officials said on Monday.

The language, which could be subject to change, implies that the major powers would not indulge in unilateral currency devaluation and reads very similarly to the last statement issued by the G7 on currencies in 2011.

"It focuses on a commitment to market-determined exchange rates and (governments) not using policies to drive currencies," one official said.

Two officials from different countries told Reuters that if agreed, the statement could be released around the time G20 finance ministers and central bankers meet in Moscow on Friday and Saturday. The G7 comprises the United States, Germany, France, Britain, Italy, Canada and Japan, while the G20 includes both advanced and emerging nations.

"The G7 has a long-standing set of rules of the game on exchange rates," U.S. Treasury Undersecretary Lael Brainard said in Washington at a briefing for reporters ahead of the G20 meeting.

"The G7 has long committed that exchange rates should float, except in rare circumstances where excess volatility or disorderly movements might warrant cooperation," she said, sidestepping a question on whether the G7 would issue a statement.   Continued...