page_title: Currency War of 2009–2011
section_title: Negotiations at the 2010 G20 summit
hierarchical_section_title: Currency War of 2009–2011 / Competitive devaluation in 2010 / Negotiations at the 2010 G20 summit
caption_attribution_description: President Barack Obama talks with Turkish Prime Minister Recep Tayyip Erdoğan after the third morning plenary session during the G-20 Summit at the COEX Center in Seoul, South Korea, Nov. 12, 2010. (Official White House Photo by Pete Souza) This official White House photograph is in the public domain from a copyright perspective, so while restrictions such as personality or privacy rights may apply, in general, manipulations are allowed.
context_page_description: The Currency War of 2009–2011 was an episode of competitive devaluation which became prominent in the financial press in September 2010. Competitive devaluation involves states competing with each other to achieve a relatively low valuation for their own currency, so as to assist their domestic industry. With the financial crises of 2008 the export sectors of many emerging economies have experienced declining orders, and from 2009 several states began or increased their levels of intervention to push down their currencies.
  Both private sector analysts and politicians including Tim Geithner have suggested the phrase currency war overstates the extent of hostility, but the term has been widely used by the media since Brazil's finance ministers Guido Mantega September 2010 announced that a "currency war" had broken out.
  Other commentators including world statesmen such as Manmohan Singh and Guido Mantega suggested a currency war was indeed underway and that the leading participants are China and the US, though since 2009 many other states have been taking measures to either devalue or at least check the appreciation of their currencies.
context_section_description: Discussion over currency war and imbalances dominated the G20 summit. Attending leaders such as Britain's David Cameron made statements suggesting good progress had been made. Yet according to most commentators no substantial agreement was reached, with the US largely unable to persuade other nations to endorse the measures it considers necessary to rebalance the global economy.  IMF managing director Dominique Strauss-Kahn said this particular summit was "more of a G20 debate than a G20 conclusion".
  The communiqué issued after the meeting did include a commitment to support enhanced monitoring so growing imbalances can be better identified, and to work on a possible future agreement for  "indicative guidelines".
  A report released after the summit by the IMF warned that without additional progress there is a risk of global imbalances approximately doubling to reach pre-crises levels by 2014.
  The lack of any resolution by the G20 led to concerns from other countries not directly involved such as Australia; if the "currency war" continues they may be exposed to harmful upwards pressure on their exchange rates.
  By December 2010, currency war was less of a hot topic and wasn't even on the agenda for the bilateral trade talks held between China and the US, but the issues still remain unresolved, with many emerging economies considering increased use of capital controls to cope with potentially de-stabilising capital inflows.
caption: US President Obama and Turkish Prime Minister Erdoğan in talks at the Seoul G20 summit. Only limited progress was made in resolving the tensions underlying the currency war.
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