Exchange Rate Policies of the G7

The paper screens the G7 summit statements on exchange rate policies from 1975 until 2023. It stresses the importance which G7 leaders attributed to the monetary turbulences which emerged after the end of the Bretton Woods system and the measures to be taken in order to restore a market-compatible functioning of exchange rate policies under floating exchange rates. In contrast, almost fifty years later, G7 meeting statements read relaxed and confident on this issue. During this period turbulences occasionally rose when the Japanese Yen faced speculative attacks and when the introduction of the Euro shifted controversies on coordination of currency moves from the G7 level to the intra-Eurozone level. The paper states that in the recent past, G7 statements got increasingly concerned about the impact of a non-G7 currency, the Chinese RMB with its policy-manipulated moves, on the G7 economies.

Kiel Institute Expert