The G20 will wrap up with entrenched positions on Syria and a little more entente over the emerging market turmoil prompted by the Federal Reserve’s impending move to slow the pace of its dollar creation programme.
The BRICS are plugging away with their plan for a $100 billion currency reserve pool to help calm forex volatility but officials admitted this is still a work in progress and won’t be deployable soon.
So, as China and Russia told India – and Washington said more broadly – it’s still incumbent upon countries to put their own houses in order.
The unsurprising rule of thumb is that countries with profound domestic problems have been the ones hit hardest since Ben Bernanke first put up his tapering plan in May. So, while the Fed may have caused the ripples, the fact the rupee is drowning is more due to India’s gaping current account deficit and general economic malaise.
The fact China and Russia have been making that point at the G20 is telling in terms of emerging market unity.
The final G20 communique is set to echo the finance ministers’ language in July, saying changes to monetary policy must be “carefully calibrated and clearly communicated”. There’s not a whole lot more that can be done given the Fed has ample domestic economic reasons to begin slowly rowing back.