Finance ministers and central bank governors from the Group of Seven (G7) nations have pledged to cooperate in addressing excessive volatility in currency markets. The group, which includes the United States, Japan, Germany, Britain, France, Italy, and Canada, issued a statement emphasizing the importance of stable exchange rates for global economic growth.

The G7 statement read, “We reaffirm our long-standing commitment to exchange rates that are determined by market fundamentals and to consult closely in regard to actions in exchange markets. We recognize that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.”

The pledge comes amid concerns about the potential impact of currency fluctuations on international trade and investment. Recent volatility in the foreign exchange markets has raised concerns among policymakers, who fear that it could undermine the fragile global economic recovery.

Specific measures were not detailed in the statement, but the commitment to close consultation suggests a willingness to coordinate intervention in currency markets if necessary. The G7 nations have a history of coordinated action to stabilize exchange rates during periods of crisis.

Economists have reacted cautiously to the G7 announcement, noting that the effectiveness of any intervention would depend on the specific circumstances and the credibility of the commitment. Some analysts have suggested that the G7’s influence on currency markets has diminished in recent years, given the rise of emerging market economies.

Despite these reservations, the G7’s pledge to address currency volatility is seen as a positive step towards promoting greater stability in the global financial system. The group’s commitment to cooperation signals a willingness to address shared challenges and to work together to support sustainable economic growth.