SHANGHAI - Financial leaders of the world's 20 biggest economies agreed to inform each other in advance about policy decisions that could lead to devaluations of their currencies, the chairman of euro zone finance ministers Jeroen Dijsselbloem said on Saturday.
The move is an addition to the traditional declaration in G20 communiques that countries will refrain from competitive devaluations, Dijsselbloem said after a meeting of G20 finance ministers and central bankers in Shanghai.
"If policy decisions lead to devaluation, we should inform and consult in advance between the different countries," he told reporters.
The decision was prompted by concerns among some of G20 financial leaders about the possibility of competitive devaluations in Japan or China, he said.
"Everyone was quite firm that we mustn't go down that road, refrain from that completely," Dijsselbloem said.
"There were some concerns that we would get into a situation of competitive devaluations and once a country starts, the risk is very large that the next country will follow."
He said in cases where devaluation is a consequence of monetary policy "motivated by real macroeconomic domestic reasons", then members must make sure to inform each other in advance to avoid surprises.
Dijsselbloem said information exchanges would take place "in the G20 context" and through the International Monetary Fund when "useful".
"The key thing is that we want to make sure that there are no surprises.
This is an extra commitment between the G20 countries that they will refrain from competitive devaluations," he said.