Russia wants the U.S. to consult G20 on decisions over Fed's financial injections

President Dmitry Medvedev will take part in the summit, where conflict is brewing over the U.S. Federal Reserve's latest allocation of $600 billion to buy Treasury bonds, money that investors are likely to redirect into emerging markets in search of higher returns, potentially fueling new asset bubbles.

"The president of Russia at least will, I expect, will insist that these types of actions will be taken only after consultations with all of the key players in the world economies,'' Russian G-20 representative Arkady Dvorkovich said.

The Russian G20 representative went on to say that G20 nations should be consulted before major decisions such as the U.S. Federal Reserve planning to inject an extra $600 billion into the U.S. banking system.

Dvorkovich said the Fed's quantitative easing measure is an internal matter of the United States but suggested that in general more co-ordination on such heavy-weight decisions with other G20 members is needed in order to prepare them to respond to changes in global markets.

He also said that Russia does not support the idea of establishing numerical targets for current accounts of countries to boost national savings and reduce debt.

"It might create a different imbalance, maybe an even more dangerous one. When we talk about the numerical criteria, we need to talk about current accounts and deficits and debt and the possibility of other criteria. A system of criteria can work, one criterion won't work," Dvorkovich said.

The United States has proposed limiting current account surpluses to encourage exporters, particularly China, to contribute to rebalancing economical growth by reducing their reliance on external demand.

China has been particularly vocal in criticism of the policy, which U.S. President Barack Obama defended on Monday during a trip to India.

President Obama says the Fed's mandate to grow the U.S. economy is good for the world as a whole but Dvorkovich reiterated that previous decisions of this nature required consultation by the G20.

But Dvorkovich also said the Fed's move may benefit Russia because its current capital inflows were too small.

"Capital inflow for Russia now is a plus. It may not be a plus for other emerging countries such as Brazil or China where economies are overheated. Our economy is not overheated," Dvorkovich said.

The United States further loosening its monetary policy continues to be a key issue for emerging market economies and is expected to be a bone of contention during the G20 nations summit in Seoul November 11-12.