By Ian Talley 

ANKARA--The world's largest economies, including China, will renew their commitment to avoid depreciating their currencies to gain a competitive trading advantage, a senior U.S. Treasury official said Saturday.

Weak growth prospects are tempting many countries around the world to devalue their exchange rates in an attempt to spur their economies, a policy that boosts exports at the expense of other countries and fuels global trade tensions. But wary of triggering a global cascade of such competitive devaluations that could add another burden to an already anemic global economy, the Group of 20 biggest industrialized and developing economies will, in their official statement due out later today, vow to refrain from the practice.

"There is a clear understanding that competitive devaluation presents a threat that everyone has to be on guard against, both in their policies and their words," the senior official said.

China's sudden decision last month to devalue its currency initially spurred worries that Beijing was reverting to its old policy playbook of using a depreciated yuan to drive growth in a bid to revive a flagging economy.

The International Monetary Fund, seen as the global arbiter on exchange rates, said the move was caused by Beijing allowing market pressures to play a greater role in setting the currency's value. Worries over China's growth have put downward pressure on the yuan of late, IMF officials said, so the depreciation was a natural occurrence.

But the move was followed by currency depreciation in other countries, including Vietnam and Kazakhstan. Japanese officials also mentioned devaluing the yen, feeding worries that China's depreciation might have sparked a dangerous round of global depreciations.

U.S. officials acknowledge the yuan's depreciation is minor compared with the roughly 15% appreciation of that currency over the past year, accounting for inflation and given that China's currency is roughly pegged to the dollar. They also accept that Beijing's change in its exchange-rate policy is a move toward the currency being more market determined, part of a broader effort to get the currency included in the IMF's elite basket of currencies that comprise its lending reserves.

But the Americans are also concerned China's currency could continue depreciating, that Beijing could reverse course if markets start pressing the exchange rate up, and that this latest depreciation could be the first of a series of downward moves.

The key test, Treasury officials say, is whether China allows the yuan to appreciate should market forces pressure it upward.

Washington has also worried that China's slowdown and recent market turmoil could cause Beijing to slow, or even reverse their plans to overhaul their economy. The government has embarked on a strategy meant to shift away from reliance on exports to consumer demand, and open up its markets to foreign investment and liberalize its economy. Those efforts are necessary to ensure long-term growth prospects, the U.S. and IMF say.

Chinese officials at the G-20 said they planned to stick to their liberalization strategy, the U.S. official said.

"We've heard in meetings this week here that there is a sustained commitment to that reform agenda," the official said. Beijing's actions, however, "will be very important in showing how that commitment will be carried forward."

Should Beijing continue to move ahead with promised economic overhauls, the official signaled Washington could support the country's efforts to get the yuan labeled a reserve currency by the IMF. "There's an openness to a positive outcome," the official said.

Write to Ian Talley at ian.talley@wsj.com

(END) Dow Jones Newswires

September 05, 2015 06:46 ET (10:46 GMT)