G20 summits do not always set the pulse racing, but this week’s gathering of finance ministers and central bankers in Moscow has a better chance than most of grabbing the attention of financial markets.
The policymakers meet at a sensitive time with the US Federal Reserve intent on slowing, then exiting a bond-buying programme that has been creating US$85 billion a month, and Beijing trying to rebalance the world’s most dynamic economy.
Chinese growth slowed only moderately in the second quarter and after causing ructions in world financial markets, Fed Chairman Ben Bernanke has been at pains to stress he will only halt the money-printing presses if he sees stronger evidence of US recovery.
Nonetheless, the Group of G20 leading economies will seek reassurances that neither will upset the apple cart.
Emerging nations have seen dramatic investment outflows since the Fed announced its exit plan, forcing policy responses around the world.
Indonesia and Brazil have raised rates, India tightened liquidity as the rupee plunged to a record low and Turkey’s central bank has intervened repeatedly to defend the lira.
