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G20 Summit Touted RMB International Status

2011/4/5 18:21:00 49

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G20 Summit Seminar International Currency

The international monetary system of the group of twenty (G20) was held in Zijin Mountain, Nanjing yesterday.

The finance ministers of the relevant countries, the president of the central bank and representatives of relevant international organizations gathered in G20.

workshop

We will focus on the reform of the international monetary system.

France is the rotating presidency of G20 this year. French President Sarkozy is the only head of state attending this meeting.

Chinese Vice Premier Wang Qishan, US Treasury Secretary Geithner, European central bank governor Tyse, well-known economist Robert Mondale and many domestic experts and scholars attended the seminar.

France supports RMB entering SDR

According to the organizers, the meeting was held in Paris in February.

G20

The continuation of the finance ministers' meeting is the first time in the G20 framework.

However, this conference is a symposium which is characterized by "informal and scholarly". It does not involve practical negotiations, nor does it issue any outcome statements.

The theme of the conference is to reform the international monetary system and reach a basic consensus on the issue that RMB should be included in the International Monetary Fund (IMF) special drawing rights (SDR).

SDR is a reserve asset and accounting unit created by IMF. It is the right of IMF to allocate funds to Member States.

Sarkozy expressed support for whether SDR's basket of currencies should be included in the renminbi.

He pointed out that it is time to set a timetable for SDR to incorporate into emerging economies such as the renminbi, which recognizes that these currencies play an increasingly important role in the global economy.

Convertibility should not be a condition.

Although Geithner also agreed to change the composition of a basket of currencies in SDR, he put forward certain conditions for the "new arrivals": the flexible exchange rate policy, the independence of the central bank and the free flow of capital.

China has not yet realized the free flow of capital, and it can not meet the requirements put forward by Geithner.

People's Bank of China

currency

Li Daokui, chairman of the policy committee and director of the world and China Economic Research Center of Tsinghua University, believes that although the renminbi is not convertible, many countries have RMB reserves. Hongkong, China, has 400 billion yuan in Renminbi deposits and has circulated in the surrounding countries.

Therefore, the Renminbi should no doubt be included in the SDR system, otherwise SDR will lose its appeal and authority.

Xia Bin, director of the monetary policy committee of the central bank and director of the Financial Research Institute of the State Council Development Research Center, said that the free convertibility of the Renminbi should not be the condition for the renminbi to enter the SDR bargaining.

Robert Mondale, a Nobel Laureate in economics and a professor at Columbia University, said in a media interview that the renminbi could be included in SDR's basket of currencies when it could not be freely convertible.

Exchange of views between China and the US

For commodity prices and currency exchange rates, Wang Qishan said that the current world economy is slowly recovering, but it is full of variables and excess liquidity in the world. We must prevent fluctuations in the exchange rate and international commodity and energy prices.

Geithner said that the biggest problem of the current international monetary system is that the exchange rate policies of different countries are inconsistent, but there is no need to sign new treaties or set up new institutions, which can be resolved through actions by all countries.

Geithner not only did not propose the responsibility of the United States itself, but also shifted the responsibility to the emerging market economies.

He said at the meeting that emerging economies with undervalued exchange rates face more severe inflation risks, and that the asymmetry of exchange rate policies will also bring pressure on trade protection.

Since the outbreak of the international financial crisis, the United States has implemented "quantitative easing" monetary policy, resulting in sharp fluctuations in global commodity prices.

The recent earthquake in Japan and the crisis in Libya have pushed the prices of commodities such as oil and gold up again, which has brought great pressure of "imported inflation" to many emerging market countries.

Li Daokui said he would not want to see the rapid depreciation of the US dollar and US Treasury bonds.

Xia Bin pointed out that the reform of the global monetary system is a long process, and we hope that the exchange rate of the major currencies will be basically stable.