Originally posted by the Voice of America. Voice of America content is produced by the Voice of America, a United States federal government-sponsored entity, and is in the public domain. G20: Currency Policy Top Issue Joe DeCapua 05 November 2010 The G20 summit gets underway late next week in Seoul. The theme of the meeting is âShared Growth Beyond Crisis.â The G20 Research Group, based in Toronto, has been following developments and issues relating to the summit. Co-director Alan Alexandroff says currency policy is high on the agenda. âI think the big issue again and continuing is the question of whether or not to kind of imbed the issue of currency and currency regimes within the broader framework of global imbalances,â he says. Alexandroff says this was a âkey discussionâ at the foreign ministersâ and central bankersâ meeting two weeks ago. Itâs expected to resurface when foreign ministers and bankers meet just before the G20 summit. Why itâs a big deal If the G20 does not produce a broad, multi-lateral agreement on currency policy, then the United States and China could square off over the issue. âWhat we were facing previously, and may still face, is a kind of knockdown, drag âem out fight between the United States and China on the question of currency and the exchange rate between the U.S. dollar and the Chinese renminbi,â he says. He says the United States has long argued than the âunwillingness to move to a market approach currency is manipulating and undervaluing the Chinese currency. And ultimately, from an American perspective, they believe that can be an issue of jobs in the United States.â Critical of the Fed The U.S. Federal Reserve Bank plans to pump $600 billion into the economy to try to jump start it. Thatâs upsetting some other G20 countries. âYes, absolutely, it is,â he says. âItâs upsetting particularly to the larger emerging market countries, which are growing relatively rapidly as compared to the United States and other, European, countries. And itâs upsetting them because the concern, from their perspective, is that this is going to push funds out into the system.â It could mean investment dollars flowing from the U.S. to the emerging market countries, where investors could see a better rate of return. âThis will potentially boost inflation in those economies,â he says, âI think most of these countries believe that the U.S. effort should be in the direction of a second fiscal stimulus in order to boost investment and create more jobs in the United States. But realistically, in the politics of Washington, thatâs not going to happen.â Thatâs where the Fed comes in. âIt would appear that this monetary strategy (pumping money into the economy) is what the United States is going to followâ¦and there is concern in the large emerging market countries and in the developing countries that this is going to hurt them,â Alexandroff says. The G20 leaders meet November 11^th and 12^th. .