"We will move towards more market determined exchange rate system and enhance exchange rate flexibility to reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.
"Advanced economies including those with reserve currencies will be vigilant against excess volatility and disorderly movement in exchange rates," G-20 leaders declared at the end of their 2-day Summit here, in the backdrop of the US demanding that Chinese currency Yuan be up-valued to check the Asian giant from taking advantage in international trade.
These measures, the leaders said, would help mitigate the risk of excessive volatility in capital flows facing some emerging market economies.
"We must at all costs avoid competitive devaluation and resist any resurgence of protectionism," Singh said at the Summit of the leaders of the world's most influential developed and developing countries.
Singh had earlier called for an end to competitive devaluation of currencies, even as Indian officials back home said that the country was capable of absorbing robust capital inflows of up to USD 75 billion.
The Seoul Action Plan, agreed at the end of the two-day Summit of the G-20 leaders, called for moving towards more market-determined exchange rates.An undervalued Yuan or a weak Dollar also has ramifications for India and several other countries in terms of their exports becoming uncompetitive.
The G-20 group includes India, the US, China, Germany, France, Brazil, Russia and Japan.
To address the concerns of several emerging economies like India, facing flush of funds in their stock markets, the declaration agrees to strengthen global financial safety nets.
It has also asked the advanced economies, including those with reserve currencies, to be "vigilant against excessive volatility and disorderly movements in exchange rates."
The declaration said these steps will help mitigate the risk of excessive volatility in capital flows that is faced by some emerging countries.
India, for instance, has seen rush of inflows from foreign institutional investors to the extent of USD 38 billion from January to November 11, this year.
In his plenary speech, Prime Minister Manmohan Singh said that the countries with currency reserves "have a special responsibility to ensure that their monetary policies do not lead to destabilising capital flows, which can put pressure on emerging markets."
The country's exporters are already starting to feel the pinch of rupee appreciation on account of FII inflows. The rupee value has risen by over 5 per cent since January, reducing the net realisation for exporters.
Singh, however, said there is a strong case for supporting long term capital flows to the developing countries especially in infrastructure.
India's concerns on fiscal consolidation in the advanced countries running big deficits got reflected in the declaration."Advanced economies will formulate and implement clear, credible, ambitious and growth friendly medium term fiscal consolidation plans...," the declaration said.
India's worries on protectionism were also found a mention in the Seoul Action Plan.
The leaders agreed that their countries will "refrain from introducing and, oppose protectionist trade actions in all forms and recognise the importance of a prompt conclusion of the Doha negotiations."
They also affirmed their commitment to avoid financial protectionism.The leaders also pledged their commitment to reform the International Monetary Fund (IMF), "that better reflects the changes in the world economy through greater representation of dynamic emerging markets in developing countries."
They said the comprehensive quota and governance reforms "will enhance the IMFs' legitimacy, credibility and effectiveness making it an even stronger institution for promoting global financial stability and growth."
To take on board concerns of the US and other western countries facing the problems of high unemployment, the leaders agreed to implement structural reforms that boost and sustain global demand and faster job creation.