Friday 28 October 2016

It's the big yuan: Leaders head to Shanghai summit

Published 22/02/2016 | 02:30

Haruhiko Kuroda, governor of the Bank of Japan, looks down at his notes during a news conference. Photo: Bloomberg
Haruhiko Kuroda, governor of the Bank of Japan, looks down at his notes during a news conference. Photo: Bloomberg

The weakening global-growth outlook and how policy makers should respond will dominate the agenda when officials from the world's biggest economies gather in Shanghai this week.

  • Go To

The Group of 20 central bankers and finance ministers will also discuss the turmoil in China's financial markets and ways to bolster a safety net for the global financial system, sources said.

China, whose hosting of the forum this year culminates in a leaders' summit in September, is pushing a detailed and diverse platform that covers everything from bolstering investment in infrastructure to climate-friendly financing.

The discussions will include exploring ways to make the global financial system more stable, updating International Monetary Fund governance and countering terrorist financing.

Any type of a sweeping global agreement to combat currency-market volatility is unlikely, even as some analysts and investors say there's a potential need for a modern-day Plaza Accord, the 1985 deal among major economies to weaken the dollar.

China's economic outlook will feature prominently. Turmoil in the nation's stock markets and weakness in its currency in January roiled investors around the world, prompting officials, including IMF managing director Christine Lagarde, to call for better communication from the nation's Communist policy makers.

The economic leaders from the Group of 20, which include the US, Germany, China and Japan, will meet in Shanghai on Friday and Saturday.

Bank of Japan Governor Haruhiko Kuroda has called for a global response on the dimmer outlook, saying it's "very important" for the US, China, Europe and Japan to take coordinated action as needed.

"I don't know how it will turn out specifically until we hold the meeting, but I think it's desirable for the G-20 meeting to be something that contributes to stabilise global financial markets," he told politicians in Tokyo last week.

For their part, Chinese officials have pinned the cause of global volatility on the Federal Reserve's decision to raise interest rates in December for the first time in almost a decade.

Authorities in Beijing are also expected to outline that the yuan's volatility is part of its path to full convertibility. (Bloomberg)

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business