Wealthy nations to battle oil threat

Member nations say fighting high oil prices, other imbalances a shared responsibility.

ST. PETERSBURG, Russia (Reuters) – Protecting global economic growth from high oil prices and rising inflation risks took center stage when finance ministers from the Group of Eight (G8) wealthy nations gathered in Russia’s second city on Friday.

The two-day meeting in St. Petersburg, paving the way for a summit here in July, comes at a time of mounting interest rates and fears in financial markets that high oil prices are sparking wider inflation, adding to other imbalances, such as a huge U.S. trade deficit, that could unravel economic stability.

But with central bankers absent and Russia still being kept at arm’s length by the other finance ministers of what remains effectively a G7 club, the talks were not due to produce any formal declaration on the key issue of exchange rates.

How fast and how far the dollar could weaken was clearly on everyone’s mind, however, especially the Europeans and the Japanese, who do not want to see their currencies rise to an extent that hurts the competitiveness of their exports.

Reuters