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G20 monitoring Ukraine for economic risks

WASHINGTON: The world’s top economies are monitoring the economic situation in Ukraine for any fallout that may pose risks to economic and financial stability, according to a draft communique by the Group of 20 finance ministers and central bankers.
The draft, which was obtained by Reuters on Friday during the International Monetary Fund-World Bank spring meetings in Washington, also said the G20 was eyeing the effects on the global economy as national policies are recalibrated.
But it did not specifically name monetary policy, and dropped a reference from a February communique that stressed central banks should be careful in withdrawing stimulus.
Addressing the crisis in Ukraine, the G20 said the IMF and the World Bank remain best-placed to help countries deal with their economic challenges “through policy advice and catalytic financing.”
“We are monitoring the economic situation in Ukraine, mindful of any risk to economic and financial stability, and welcome the IMF’s recent engagement with Ukraine as the authorities work to undertake meaningful reforms,” the draft communique said.
“The situation in Ukraine highlights the important role of the IMF as the world’s first responder to financial crises.”
Ukraine’s economy was thrown into chaos after popular protests in Kiev ousted pro-Russian President Viktor Yanukovich in February, and Russia seized Ukraine’s Crimea and annexed it, causing the worst standoff between Moscow and the West since the Cold War.
In the section of the draft that appeared to address spillover effects of the monetary policies of advanced economies, the G20 pledged to provide “clear and timely communication” of its actions, with an eye on the effects on the global economy as policies are “recalibrated.”
The G20 also kept up the pressure on the United States, which has held up IMF reforms agreed in 2010 that would double the Fund’s resources and give more say to emerging markets such as the BRICS countries — Brazil, Russia, India, China and South Africa.
The G20 is “deeply disappointed with the continued delay in progressing the IMF quota and governance reforms,” the draft said.
It indicated that the G20 was still debating how tough a stand it should take on the US inaction. In either case, the group would give Washington until year end to approve the reforms before deciding its next steps.