G20 leaders drew a veil over their economic policy disputes, agreeing to tackle tensions that have raised the spectre of currency wars and giving the nod to countries that have seen huge capital inflows to impose controls.
The developed and emerging nations agreed at a summit in Seoul to set vague "indicative guidelines" measuring imbalances between their multi-speed economies but calling a timeout to let tempers cool – left the details to be discussed in the first half of next year.
In the final statement of the summit, the group's fifth since the financial crisis exploded in 2008, the leaders vowed to move towards market-determined exchange rates and shun competitive devaluations.
They also agreed that there was a critical, but narrow, window of opportunity to conclude the long-elusive Doha round of trade liberalisation talks launched in 2001.
After weeks of verbal jousting, the United States and China sought to bury the hatchet over Beijing's currency, which Washington says is undervalued, and global risks stoked by the U.S. Federal Reserve printing money to rev up its struggling economy.
"Exchange rates must reflect economic realities... Emerging economies need to allow for currencies that are market driven," U.S. President Barack Obama told a news conference after the communique was agreed.
"This is something that I raised with President Hu of China and we will closely watch the appreciation of China's currency."
The G20's accord sought to recapture the unity that was forged in crisis two years ago, but deep divides meant the leaders could not venture much beyond what was already agreed by their finance ministers last month.
Negotiators had laboured until the early hours of the morning to thrash out an agreement their leaders could all endorse, despite sharp disagreements that were on public display in the days before the meeting.
In a departure from earlier statements, the G20 said it would allow emerging market countries with "adequate reserves and increasingly overvalued flexible exchange rates" to use "carefully designed macro-prudential measures."
City A.M. Reporter