The Group of Twenty (G20) economies would have to find a formula to deal with both the source and the destination of the huge capital flows that were impacting on the currencies of a number of developing economies and the competitiveness of these economies, Finance Minister Pravin Gordhan said on Tuesday.

Speaking at a media briefing ahead of the G20 Seoul Summit, which starts on Thursday, Gordhan said that South Africa was firm in its view that a "global solution" had to be found to the challenges facing the global economy.

The rapid movement of massive capital flows in the world was leading to the currency challenges faced by many emerging economies, including South Africa.

However, as this was a global problem, the solution would not lie only in what developing economies could do to defend their currencies, he stated.

It would be important to find a balance between meeting the needs of developed economies to stimulate their economic growth, create jobs and grow their exports, while also ensuring that the measures taken by developed economies were compatible with what other economies have to do to reach the same goals, noted Gordhan.

Governments had to ensure that, while they were implementing measures to grow their own economies, this should be not at the expense of other economies, he said.

The US Federal Reserve's decision to buy additional longer-term Treasury securities worth $600-billion in a second round of quantative easing (which was effectively printing money) to stimulate the US economy has been met with criticism from other economies, including from South Africa.

When the announcement was made last week, Gordhan criticised the US for this "unilateral step", expressing concern that developing economies would bear the brunt of the consequences of this move.

On Tuesday, he said that it was still too early to measure the impact of the quantative easing on South Africa.

However, if the rand appreciated further as a result of this move, consumers would pay less for fuel and other imported goods, while inflation would be kept down.

On the other hand, this made some of South Africa's sectors, including the manufacturing sector, which was one of the largest contributors to the country's overall gross domestic product, uncompetitive, which could result in further job losses.

More than one-million jobs were lost during the 2009 recession.

Gordhan highlighted that the debate around the currency crisis and calls against competitive devaluations and trade protectionism measures were ongoing.

The idea suggested by World Bank president Robert Zoellick on Monday that developed economies should consider adopting a modified global gold standard to guide currency rates, reflected the fact that the world economy was reaching a point where the "old normal" was no longer good enough, said Gordhan.

The G20 countries had to contribute on the debate of how to create a "new normal", he added.

Meanwhile, other issues that South Africa was expecting would be raised during the upcoming G20 summit, included climate change and "green" growth prospects, as well as if there were better prospects for trade-related agreements than the Doha trade round, which has stalled after ten years.