Chinese Currency: The G-7 Weighs In

By September 17, 2006Trade

The G-7 Group of finance ministers of the top industrialized nations were a little late to the China currency issue, but finally joined the fray back in April, as you might recall. Treasury Secretary Hank Paulson is stopping off at the G-7 Finance ministers meeting this weekend in Singapore on his way to China.

Yesterday they called on China to let their currency — the yuan — float, or at least to let it rise faster than it’s been rising, which is almost imperceptible. As you’ll see in their statement, they took the unusual step of singling China out by name:

“We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate. Greater exchange rate flexibility is desirable in emerging economies with large current account surpluses, especially China, for necessary adjustments to occur.”

Let’s hope the addition of this influential voice to our own will finally get some results in the way of movement on the yuan from China.