The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx

Abstract

The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx

Meeting amid media and market attention to the weak dollar, the finance ministers and central bank governors of the seven major industrial countries (Group of Seven) on February 7 reaffirmed their belief that exchange rates should reflect economic fundamentals, adding that “excess volatility and disorderly movements in exchange rates are undesirable for economic growth.” They also emphasized that “more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.”

While the dollar took center stage in media attention, the statement issued at the end of the weekend-long meeting in Boca Raton, Florida, indicated that a wide range of issues was discussed. The representatives were upbeat about global growth prospects for 2004 but remained concerned about the uneven pace of growth in the seven countries. Supply-side structural policies that enhance flexibility, they reiterated, hold the key to higher productivity growth and increased employment.

The importance of combating terrorism and boosting economic growth in the Middle East also featured prominently in the discussions. The IMF and the World Bank were called upon to “make permanent and comprehensive their assessments of countries’ efforts to combat terrorism financing,” and the group expressed its commitment to further enhancing transparency and supervisory standards in financial markets, particularly in noncompliant offshore centers (see related story on page 38).

The finance ministers and central bank governors welcomed steps taken on the monetary front in Iraq, progress on the reform and reconstruction efforts in Afghanistan, and IMF and World Bank plans to provide both countries with financial and technical assistance. The group also urged other countries to join in efforts to reduce the debt burdens of Iraq and Afghanistan.

Finally, in a discussion of reforms of the international financial system, the meeting reviewed progress on “improved surveillance, collective action clauses, limits on exceptional access, measuring results, and the use of other mechanisms, including grants, to avoid heavy debt burdens.” The ministers and central bank governors also called on Argentina to “implement policies in line with its IMF program” and to “engage constructively with its creditors to achieve a high participation rate in its restructuring.”