GYEONGJU, Korea (Bloomberg) — Group of 20 finance ministers and central bankers vowed to avoid weakening currencies to lift exports, leaving leaders to flesh out new ways of prodding fellow member China to allow faster gains in the yuan.

Officials ended talks in South Korea on Saturday pledging to refrain from "competitive devaluation" and to let markets set foreign-exchange values more as they sought to calm fears that they risk a trade war by using cheaper currencies to spur growth.

They called for more sustainable current-account gaps without embracing a US proposal for targets, an initiative aimed at making a yuan advance more palatable to China.

The task of finding a broader agreement now falls to next month's Seoul summit of leaders as strategists from UBS AG to Westpac Banking Corp. said the decisions taken in Gyeongju were unlikely to mark an end to the dollar's recent slide or trigger a quicker rise in the yuan.

The immediate direction of markets will likely be driven by next week's Federal Reserve meeting as Chairman Ben Bernanke signals it may buy more assets.

"Tensions may be reduced in the short term, but in the longer term there are still imbalances," said Mansoor Mohi-uddin, the Singapore-based head of global currency strategy at UBS. The second biggest currency trader expects the yuan to reach 6.55 per dollar by the end of the year from 6.66 last week.

"The focus will shift to the Fed's quantitative easing for the dollar. The yuan will continue a modest appreciation."

US Treasury Secretary Timothy Geithner said in an interview he's optimistic that China will "continue to move" on the yuan.

The G-20 called the economic recovery "fragile and uneven". To increase the say of developing nations in the International Monetary Fund's decisions, the G-20 endorsed what IMF managing director Dominique Strauss-Kahn called the "biggest reform ever" of its governance with European authorities agreeing to cut their role.

It was the first time the economic policy makers took a joint stance on exchange rates having previously resisted doing so for fear of alienating China. The G-20 statement still recycles language used at previous leaders' summits in London and Toronto and falls short of the currency accords of the 1980s.

"I don't see anything that's going to discourage people from resuming selling dollars and buying currencies that look to be undervalued," said Sean Callow, a senior currency strategist at Westpac in Sydney.

The officials met as China's restraint of the yuan and the US dollar's recent drop force trading partners including South Korea and Brazil to temper gains in their own floating currencies to remain competitive.

Geithner predicted China will allow the yuan to appreciate more because officials there understand it's in the long-term interest of domestic growth and global economic stability.

"They recognise it's important to the world," he said in an interview on Saturday with Bloomberg Television. As China's currency stance affects more countries, "China recognises that, and I think we're going to see them continue to move."

David Bloom, global head of currency strategy at HSBC Holdings Plc in London, nevertheless predicted "the 'currency war' will persist at least through" to the Seoul meeting. That may spark a dollar rally because ongoing frictions and the threat they prompt greater capital controls and protectionism may deter investors from riskier exchange rates, he said. Japanese Finance Minister Yoshihiko Noda reiterated that the G-20 meeting didn't prompt any change in Japan's currency policy, saying it stands ready to counter a rise in the yen if needed. The US Federal Reserve also came under fire. Bernanke received "criticism" from within the group after his move toward easier monetary policy pushed the dollar down, German Economy Minister Rainer Bruederle said.

"It's the wrong way to try to prevent or solve problems by adding more liquidity," Bruederle said. "Excessive, permanent money creation in my opinion is an indirect manipulation of an exchange rate."

To dilute the focus of such gatherings on currencies and help rebalance the world economy away from excess US demand and Chinese savings, Geithner suggested goals for current-account deficits or surpluses.

While South Korea and Canada back the strategy, it was challenged by major exporters Germany and Japan.

The group will adopt "the full range of policies conducive to reducing excessive imbalances" and making them sustainable, the statement said. The IMF will deepen its monitoring of currencies and continuously wide trade deficits.