France Said Not to Have Held Secret Currency Talks With ChinaFrancois de Beaupuy
France has not held secret talks on currency coordination with China, a French government official familiar with the matter said, denying a report in today’s Financial Times.
President Nicolas Sarkozy will become chairman of the Group of 20 forum in November and is preparing for that role now, said the person, who declined to be identified because he wasn’t authorized to comment publicly.
Sarkozy in August reiterated a call to overhaul the global monetary system, saying discussions on currencies should be open to countries beyond the Group of Seven leading industrial nations, including China, and urging enhanced international coordination and global governance.
The French president cited the possibility of expanding access to the International Monetary Fund’s special drawing rights, the institution’s unit of account based on a basket of currencies, to “reinforce the stability” of the monetary system.
Since G-20 leaders began holding summits in November 2008, they have pledged not to raise or impose trade barriers, seeking to avoid the type of protectionist measures that crippled the global economy in the 1930s.
The G-20 pledged in April 2009 in London to “refrain from competitive devaluation” of their currencies, and the leaders said at their last gathering in Toronto in June that “market- oriented exchange rates that reflect underlying economic fundamentals contribute to global economic stability.”
China has incurred international criticism for limiting gains in its exchange rate. The yuan has risen about 2 percent versus the dollar since the People’s Bank of China in June pledged greater flexibility in the currency after pegging it around 6.83 for two years.
The G-20 includes the world’s biggest developed and emerging-market nations, from China, Brazil, Russia and India to the U.S., Japan, Germany, France and the U.K. Its finance ministers meet in Korea on Oct. 21-23 ahead of the summit of leaders in Seoul on Nov. 11-12. The topic of currencies will also likely be discussed when finance chiefs gather in Washington in the coming week for the annual meetings of the IMF and World Bank.
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