Montgomery: G-8 Summit Delivers More Plans than Action
DEBORAH MARCHINI, CNN ANCHOR: The G-8 summit in Japan ended over the weekend, but what results were reached, more specifically, with regard to global currencies?</s>DAVID HAFFFENREFFER, CNN ANCHOR: Joining us now to discuss, among other issues, the impact on the dollar, should Japan decide to raise rates a little bit later on this year is currency economist Allison Montgomery -- pardon me -- of IDEAglobal.com. Welcome, and happy Monday morning to you.</s>MARCHINI: Good morning, Allison.</s>ALLISON MONTGOMERY, IDEAGLOBAL.COM: You too.</s>HAFFENREFFER: What are some of the headlines coming out of the G-8 meeting?</s>MONTGOMERY: Well, it's been -- it sort of seems to be more of G- 8 meeting that's come out with more plans than necessarily action, which is probably partly the result of the fact that they haven't had a major sort of financial crisis around the world to be focusing on that they have had in recent years, with the Asia crisis or something going on Russia. But, basically, one of those things that was mentioned was the -- that they really want to push forward for a new WTO negotiation round later this year, which should really lead to the formalization of China acceptance into WTO. The other thing that was mentioned, and it was mentioned a little bit on Friday in their talks, was the -- that oil prices are a concerned to the G-8, that they're concern is that that could sort of damage world growth going forward.</s>MARCHINI: Yes, that basket of OPEC crudes is down again this morning, and what that basically means is OPEC has less reason officially to increase production. There have been reports that Saudi Arabia has been unofficially increasing production. Any sense of relief there on the part of the G-8?</s>MONTGOMERY: Well -- I mean, yes, there definitely has been those reports, and there is sort of positive news on the front of Saudi Arabia -- start again -- moving forward to increase by another 500,000 barrels this year on sort of August, September are the next sort of key months to watch there.</s>MARCHINI: Time was when Russia, a member of the G-8, was the world's largest oil producer. I wonder if you can tell me whether there's any prospect that Russia could, at some time, soon become a meaningful supplier of oil to the world market?</s>MONTGOMERY: That is -- it's probably actually something to keep an eye on. I mean, Saudi Arabia, at the moment, is still leading in that area and also leading in these negotiations in terms of, if they increase supply, then you can start to look for other countries to lead (ph) supply. So I still think they are the focus.</s>HAFFENREFFER: Russia was also hoping to get some good news on the debt-forgiveness front, perhaps on this -- on the -- over the weekend with this G-8 summit. Any news on the front? That was also sort of a hot button issue for a number of different countries.</s>MONTGOMERY: Right, yes, it looks like what they've agreed to is sort of more a debt rescheduling for Russia, rather than debt forgiveness, and the debt forgiveness has been sort of more aimed at other countries, such as Africa. So, yes, probably not that much good news on that front for Russia.</s>MARCHINI: Any more heat or Japan, or did we see all of that when the finance ministers met a couple of weeks ago?</s>MONTGOMERY: Exactly. I mean, that was the thing with this meeting was that we didn't have the central bank governors there, and we didn't have all the finance ministers. Summers was obviously there, stepping in for Clinton, who couldn't make it initially. But -- so what we really did see was we saw some mention late Friday on the fact that Japan does need to keep focused on policies and at boosting domestic demand. But they did mention the fact that they are seeing signs of recovery in Japan, which I think more -- is increasingly becoming the focus.</s>MARCHINI: Japanese rates are not going up, though?</s>MONTGOMERY: Well, I mean, that's obviously the issue, and I think what's interesting is that, yes, they probably will remove the zero interest-rate policy soon, but I think, as long as they sell it as a normalization, rather than a monetary tightening, and as a one- off move, that the yen shouldn't strengthen too much on it, and Japan's economy still should be able to move forward.</s>HAFFENREFFER: All right, Allison Montgomery, IDEAglobal.com, good to see this morning.</s>MARCHINI: Thank you so much.</s>MONTGOMERY: Thank you.