NANJING (MNI) – French Finance Minister Christine Lagarde said
Thursday that the world’s major economies need to agree new rules to
ensure global monetary stability — including carving out a beefed up
role for the Chinese yuan — to avoid crises such as that seen in
2007/2008.
Lagarde told reporters that the High Level Seminar on the
International Monetary System, held here, was a success, but gave few
indications if any specifics had been agreed among representatives of
the world’s major economies.
She said work should start immediately on broadening the basket of
currencies used in IMF special drawing rights (SDR) to include the
Chinese yuan.
“The timeframe is to be agreed upon but we should start right now
on work to broaden the basket, in particular with the Chinese yuan,” she
told reporters at a press conference on the sidelines of a G20 seminar
on monetary system reform here.
But she added that the work referred to would be a study of the
idea. “There’s nothing to stop us from studying. That could start
shortly.”
She reiterated an earlier warning from French President Nicolas
Sarkozy that the world could opt for cooperation in the current G-20 or
division, which would risk crises and currency wars.
“We’re facing a situation which is a bumpy road. The price of raw
matrerials whether agriculture or energy will be more volatile, less
stable and impact growth. Growth has picked up, not exactly in the same
pace (around the world)… but we clearly need to be better prepared,”
she said.
“We can’t allow reserves to build in certain countries and we need
address this situation with instruments like credit lines from IMF.”
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