After Rome, G7 Makes Comments on the Exchange Rates

The G7 or the Group of Seven is composed to industrialized nations and works for the betterment of the world. Recently, they had softened up their tone when it comes to the yuan currency of China as indicated in a statement made in Rome last Saturday. However, it also did not come as a surprise that the G7 did not single out any moves on other currencies such as the pound or the yen. The comments were made by some officials and were concerned over the exchange rates that were made. These were also from some joint statements provided by the G7 last Saturday and during the last meeting they had in October.

Statements Made by G7

The G7 made several statements regarding this matter. First, they said that they actually welcome the fiscal measures as well as the continuing commitment to move towards a flexibly better exchange rate. Doing so, it was believed, will lead to a continued growth as well as appreciation of the currency Renminbi (also known as the yuan) in more effective terms and also to help to promote a balanced sense of growth in the country of China as well as in the economy of the world. They also mentioned that there was some excess volatility as well as disorderly movements in the exchange rates, and that these had very adverse implications when it comes to stability in the economy. They also said that they are continuing to monitor the market of exchange rates very closely in the spirit of cooperation as such as appropriate.

Previous Statements Made Again by the G7

It has not been the first time that the G7 had made such statements. In last few months that had passed the previous year, we recall that they mention their reaffirmed commitment and interest in creating and maintaining a strong and stable system of international finance.  They also said that given that China had a very important role in performing in the global economy, they invariably encourage their authorities to let the accelerated appreciation of yuan to be effective in exchange rate as a way of further promoting the state of the domestic economy and the promote external stability. Timothy Geithner himself shares some of his own points regarding the matter.

He mentioned that it is very important to highlight China nowadays because such a country is instrumental in stimulating the world economy as well as today’s financial system. They very much welcome any steps that they have attempted to make in order to strengthen the domestic demand. Geithner also mentioned that they also appreciate their commitment to further revolutionize the system of exchange rates, which was something he really wanted to underscore.  He goes on to say that the United States of America is very much committed to working very closely as well as cooperatively with China as both power nations move toward addressing this global-scale economic crisis.