China warms up for G20 summit with promise of stable yuan

China warmed up for the Group of 20 (G20) summit in Hangzhou by assuring the world that its currency will be stable.

At a newly renovated press centre for the forum for the world’s top 20 economies, Yi Gang, a deputy central bank governor, said the yuan had withstood market shocks and stayed largely stable, and that G20 policy coordination would only make the currency “more stable”.

Yi said the yuan exchange-rate fluctuations had been “smaller than most of the reserve currencies and much smaller than emerging currencies”, according to a transcript of the conference carried by Xinhua.

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“One agreement at G20 is that there should be closer communication and coordination on exchange rates…which will make our exchange rates more stable,” Yi said.

The press conference by Yi was the first major event for journalists registered for the G20 summit, to be held on Sunday and Monday.

However, an unexplained security measure was imposed about half an hour before Yi’s scheduled talk, which delayed dozens of journalists from entering the compound where the press centre is located.

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Yi took questions at the event from China Daily, Hong Kong-based Phoenix TV, Xinhua and the China News Service, addressing issues regarding growth and international financial governance in addition to the currency.

The exchange rate of the yuan is unlikely to be singled out at the G20 summit, but the value of the currency has been a market concern, and Beijing has been trying hard to dispel anticipations of a sharp depreciation.

At earlier meetings between G20 central bankers and finance ministers, attendees pledged that there would be no competitive currency devaluations.

Yi said the yuan had withstood market shocks and remained largely steady.

“Overall, the yuan has ­remained basically stable at a ­reasonable and balanced level,” he said.

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Yi added that the yuan had shown little volatility despite ­uncertainty about the US Federal Reserve’s rate-hike plans and the shock to global markets caused by “Brexit” – Britain’s vote to leave the European Union.

Yi also said China hoped emerging markets would have a bigger voice in the International Monetary Fund, to make the lender’s practices “more fair and open”.

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Yi also spoke highly of Special Drawing Rights, an accounting unit of the IMF. China hosted the World Bank’s first issue of SDR-denominated bonds yesterday, one month ahead of the yuan being officially included as the fifth currency in the SDR basket, along with the US dollar, the euro, the British pound and the Japanese yen.

China hopes the Hangzhou summit will raise its international presence and cement its voice in global economic governance. A successful event would be seen as a political trophy for the leadership in Beijing.

The Xiaoshan district of Hangzhou, home to the conference venue, is already in G20 mode, with heavy security, roadblocks and a huge army of volunteers roaming the scene.

Additional reporting by Zhou Xin

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