G20 vows to calibrate pace of interest rate hikes, avoid spillovers

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G20 summit in Bali

NUSA DUA, Indonesia (Reuters) -Leaders of the Group of 20 (G2) major economies said on Wednesday their central banks will continue to calibrate the pace of monetary policy tightening, while being mindful of the need to limit “cross-country spillovers.”

In a leaders’ declaration, the G20 members also reaffirmed their commitment to avoid excessive exchange-rate volatility while recognising that “many currencies have moved significantly” this year.

“G20 central banks … are closely monitoring the impact of price pressures on inflation expectations and will continue to appropriately calibrate the pace of monetary policy tightening in a data-dependent and clearly communicated manner,” the statement said.

The central banks will also be mindful of the need to limit spillovers, it added in a nod to concern among emerging economies over the impact aggressive U.S. rate hikes could have on their markets.

“Central bank independence is crucial to achieving these goals and buttressing monetary policy credibility,” it said.

(Reporting by Leika KiharaEditing by Shri Navaratnam)

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