FRANKFURT (MNI) – France and China have been in discussions for the
past year as part of a French effort to increase coordination of
exchange rates, the Financial Times reported Saturday.
The talks have been kept under wraps in order to engage China on
global currency coordination, the paper reported. French President
Nicholas Sarkozy wants to open a debate on that subject when his country
assumes the presidency of the G20 in November, people close to the
matter told the FT.
Sarkozy will also seek a common approach to the issue in meetings
with Chinese president Hu Jintao, set to take place in November when the
latter visits Paris. The sources said that France is not proposing
fixing exchange rates but rather figuring out which institution should
address global currency issues, the FT wrote.
Sarkozy is to discuss the currency coordination topic in meetings
with U.S. President Barack Obama, when the former next visits
Washington, the paper said. Sarkozy may also bring up the topic when he
next meets with German Chancellor Angela Merkel, the FT said.
Concerns about international currencies and competitive
devaluations have come to the forefront with Japan’s recent intervention
to keep the yen from gaining against the dollar.
Furthermore, pressure has increased in the U.S. Congress to force
the Chinese to stop artificially keeping the yuan low against the
dollar, a policy that helps make imports from China cheaper than
domestically made American products.
Last week, Brazil’s finance minister made headlines by saying that
the world was currently in a currency war.
–Frankfurt bureau; +49-69-720142; tbuell@marketnews.com
[TOPICS: MGX$$$,M$X$$$,M$G$$$,MFX$$$,M$$FX$,M$A$$$,M$Q$$$]