Canada says currency talks should extend beyond G7

Fri Oct 2, 2009 3:04pm EDT
 
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By Louise Egan

ISTANBUL (Reuters) - Canadian Finance Minister Jim Flaherty reminded his European counterparts on Friday that they are not alone in bearing the brunt of a weak U.S. dollar and said any global currency discussions should rightly extend beyond the G7 group to include Asian countries.

Flaherty spoke to reporters in Istanbul ahead of a meeting of the Group of Seven finance ministers and central bankers on Saturday. He said he expected there would be a brief communique after the meeting.

"There's an important policy role for the G7. If we have substantive discussions, and I imagine we will, then I would expect some sort of brief communique," he said.

Part of the discussion on global imbalances would inevitably include the impact of the weak U.S. dollar on other economies and the Chinese yuan, which Flaherty has said is not flexible enough.

"I know the Europeans are concerned about the euro and upward pressure on the euro ... that's not unique to Europe," he said.

"The Australians are concerned; we're concerned in Canada about upward pressure on the Canadian dollar because of the weakness of the U.S. currency," he said.

The Canadian dollar has surged nearly 20 percent against the U.S. dollar since March, prompting Bank of Canada Governor Mark Carney to repeatedly warn that the strong currency could hamper the economic recovery.

In solving global imbalances, the main challenge is to persuade major economies to have flexible currencies, Flaherty said in a repetition of his frequent references to China.   Continued...