Asia-Pacific finance ministers endorsed "market-oriented" exchange rates on Thursday and said they would stick with economic stimulus plans until a sustained economic recovery was under way.
U.S. Treasury Secretary Timothy Geithner said the timing of stimulus exit policies would vary between countries, but business confidence and the financial system must be restored first.
"The challenge is growth. First growth, but make sure we have business confidence restored, investments expanding again, unemployment coming down, financial sector definitively repaired - that's our basic challenge," Mr. Geithner said in Singapore after a meeting of Pacific rim finance ministers.
The ministers of the 21-member Asia Pacific Economic Cooperation, which includes Canada, discussed strengthening the post-crisis global economy to prevent asset bubbles and excess leverage with prudent macroeconomic and regulatory policies.
In a statement they agreed to "undertake monetary policies consistent with price stability in the context of market-oriented exchange rates that reflect underlying economic fundamentals".
The group includes China, which has effectively pegged its currency against the U.S. dollar since the middle of 2008 to help fend off the global downturn.
Other APEC economies aside from China manage their currencies to some degree, including Singapore, Malaysia and Vietnam.
U.S. President Barack Obama told Reuters in an interview this week that he would raise the currency issue on a visit to China next week. His administration says an undervalued yuan is one factor contributing to economic imbalances between the first- and third-biggest economies in the world.
China's central bank said on Wednesday it will consider major currencies in guiding the yuan, suggesting a departure from the effective dollar peg.
"I'd say that ... is the most significant news we've had on the yuan for months, and that APEC is more of a formal reminder from China's closest neighbours, not just the U.S. and Europe, that forex rigidity in a huge trading economy is not a domestic issue," said Westpac Banking Corp. strategist Sean Callow.
Emergency measures put in place by APEC member governments, including some $1-trillion in Asia alone and $787-billion in the United States, prevented a deeper recession, Mr. Geithner said.
However, Australian Treasurer Wayne Swan told reporters before going into the APEC meeting: "What we have to do is to make sure that we don't withdraw global support too early."
"In Australia's case, our economic stimulus peaked in the middle of this year and is being gradually withdrawn as we go through the rest of the year," Mr. Swan said.
World Trade Organization director-general Pascal Lamy cautioned of a false dawn in the recovery.
"There's certainly a recovery happening, certainly in this region, which has suffered less from the crisis than from other regions of the planet," he told CNBC in an interview on the APEC sidelines in Singapore. "But I would be prudent whether or not this would be sustainable six months or a year from now."
He said rising unemployment was the main threat to free trade and could spark greater protectionist policies around the globe.
Jobless queues have jumped across the industrialized world since the global economic crisis erupted a year ago and have been a prime reason nervous governments have resisted calls to start winding back stimulus measures.
APEC's trade and foreign ministers pledged to refrain from raising new barriers to trade and investment, and said a review of measures taken by member economies that began last July to ensure they were not protectionist would continue into 2010.
The ministerial meetings will be followed by a weekend summit of leaders of APEC, which is dominated by members of the Group of 20, including the United States, Russia, Japan and China.
Diplomats expect discussion on the sidelines on how to bring North Korea back to talks on ending its nuclear arms program, and the United States' decision to engage Myanmar's junta.
On a side visit to Manila on Thursday, U.S. Secretary of State Hillary Clinton called for the unconditional release of Myanmar democracy icon Aung San Suu Kyi but suggested there could be high-level contacts with the country's military leaders at the summit this weekend.
The APEC meeting represents one of the final opportunities ahead of next month's Copenhagen summit for leaders to overcome differences on the shape of a climate pact to fight rising seas, more chaotic weather and threats to crops and livelihoods.
However, there is little prospect of new initiatives emerging in Singapore this weekend and the climate agenda might instead focus on liberalizing trade in green goods and services.
APEC member economies account for 40 per cent of the world's population across four continents, more than half of global gross domestic product and nearly half of world trade.
But their members range from relatively poor countries such as Papua New Guinea, Peru and the Philippines, emerging markets such as Indonesia, Thailand and Malaysia, and rich economies, including the United States, Canada and Japan.Report Typo/Error