G20 to hasten economic reforms, says cheap credit not enough

The International group of governments and central bank governors from 20 major economies agreed Saturday to hasten slow growth, saying the low interest rates will not be enough to accelerate economic improvement, but they are optimistic that growth will happen.

According to Reuters, G20 leaders are confident that economic growth will pick up, but as a result interest rates will rise in advanced economies, which means the United States of America.

G20 finance ministers and central bankers' communiqué said, "Monetary policies will continue to support economic activity consistent with central banks' mandates, but monetary policy alone cannot lead to balanced growth."

In Channel News Asia's report, China's Finance Minister Lou Jiwei along with other top financial officials told G20 that their country's financial markets will be stable and their currency will not be devaluated any time soon, as fiscal spending is expected to grow faster than expected in 2015.

CNBC, on the other hand said in a report that during G20's meet in Turkey, the People's bank of China quoted China's central bank governor Zhou Xiaochuan saying, "At present, the exchange rate of the renminbi against the dollar is stabilising, the correction in the stock market is already mostly over and the financial markets show hope for stabilising."

G20 finance ministers tried to quell fears from the Chinese economic slowdown during the two-day meeting in Turkey as they expressed optimism in the economic forecast. This is amidst all evidence pointing to slow global growth.

European ministers support Beijing's moves, convincing G20 officials that the devaluation of its currency and new currency management arrangement is a step closer to market-determined exchange, and not just a ploy to boost exports.

Turkish Deputy Prime Minister Cevdet Yilmaz said, "We heard different opinions on the possible Fed decision. Some think the Fed needs to make a decision sooner rather than later while others think it should delay."

G20 leaders said they would prevent any excessive moves to control the volatility of capital flows from smaller economies into dollars, which is the major reason for the fears of a possible Federal Reserve interest hike.