Finance chiefs from the Group of 20 major economies started a one-day meeting Wednesday with the focus on addressing global inflation, accelerated by Russia’s ongoing military assault on Ukraine.
But the meeting in Washington may only demonstrate the widening rift within the group over the war in Ukraine. Russian Finance Minister Anton Siluanov is likely to join the gathering virtually even though Western nations have urged that the country be removed from the G-20 in protest at Moscow’s invasion.
U.S. Treasury Secretary Janet Yellen, who had said she would boycott some G-20 discussions should Russian officials turn up, will only attend “select sessions” of the meeting, the Treasury Department said.
Separately, Japanese Finance Minister Shunichi Suzuki is planning to hold a bilateral meeting with Yellen amid a rapid depreciation of the yen, which tumbled to a fresh 20-year low in the 129 zone against the U.S. dollar Wednesday morning in Tokyo.
The yen has fallen due to the divergent monetary policies pursued by the Bank of Japan and U.S. Federal Reserve, which has started tightening its monetary grip to curb inflation. The BOJ has maintained its powerful monetary easing.
The meeting of the G-20 finance ministers and central bank governors is taking place on the sidelines of the weeklong spring meetings of the International Monetary Fund and the World Bank in the U.S. capital through Sunday.
In late March, leaders of the Group of Seven industrialized nations, all of which are members of the G-20, agreed that international organizations and multilateral forums should no longer conduct activities with Moscow “in a business as usual manner.”
The G-7 nations have imposed a slew of sanctions against Russia such as freezing the assets of President Vladimir Putin and the Russian central bank as well as excluding some major lenders from a key international payment network.
The G-20 finance chiefs, who represent 80 percent of the world’s gross domestic product, have a handful of issues on their agenda in the first ministerial-level meeting since Russia’s attack on Ukraine, including the response to the coronavirus pandemic in addition to rising food and energy prices.
Surging raw material costs and energy prices have already taken a heavy toll on the global economy, with the latest IMF World Economic Outlook projecting this year’s global economic growth to be 3.6 percent, down 0.8 percentage point from its January forecast.
The tightening of U.S. monetary policy, which began in March as a response to inflation that has been increasing at its fastest rate in more than 40 years, also puts emerging economies’ currencies at risk of weakening and thus causes their foreign debt burden to increase.
The G-20 chiefs are unlikely to issue a joint statement due to the potential division over Russia and instead may have Indonesia, this year’s rotating chair of the group, release the results of the discussions at the meeting, according to sources familiar with the matter.
The G-20 groups Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.