South Korean President Lee Myung-Bak has said he is hopeful the upcoming G20 summit can set firmer guidelines on limiting trade imbalances, while playing down the likelihood of numerical targets.

Mr Lee, in an interview with the Financial Times, also said nations should be able to act unilaterally to control capital flows, despite the Group of 20’s broad rules on averting currency and trade rows.

G20 Finance Ministers meeting in South Korea last week vowed to “pursue the full range of policies conducive to reducing excessive imbalances and maintaining current-account imbalances at sustainable levels”.

But they failed to support a US proposal for a specific limit on current account surpluses or deficits, equal to four per cent of gross domestic product.

“Right now I do not know if I can tell you whether or not we are going to work towards a specific numerical target,” Mr Lee told the newspaper.

Mr Lee conceded that the November 11-12 G20 summit in Seoul would probably be marked by “lots of dissent”, but predicted that Germany and China would cooperate in crafting stronger rules.

He said he shared the concerns of Indian Prime Minister Manmohan Singh about the struggle by emerging markets to control inflows of cash prompted by very low interest rates in the West.

South Korea’s central bank this week raised the possibility of introducing some restrictions on destabilising investment flows.

But Mr Lee said these should not be seen as capital controls but “macroprudential policies” under the G20 umbrella.

Brazil, Indonesia and Thailand have all attempted to limit the disruptive effect of inflows, but Mr Lee said he “won’t define any country’s measures as capital controls”.

The South Korean leader said China recognises the need to help ensure sustainable and balanced growth, and broadening the debate from a narrow focus on the yuan was helping to secure its support.

Central bank governor Kim Choong-Soo told a business forum on Friday that foreign exchange rate volatility was expected to ease following last week’s ministerial agreement.

In addition to pledging to reduce current account imbalances, the ministers agreed to refrain from competitively weakening their currencies and to move towards a market-determined forex system.

“Given the fact that excessive capital flows have amplified currency volatility, this kind of discussion is expected to stabilise foreign exchange rates. This will have positive impacts on trade,” Mr Kim said.