G7 finance chiefs on Saturday warned against currency volatility, stressing the importance of a strong dollar and a flexible yuan exchange rate for future global economic stability.
“We have reaffirmed the necessity for the Chinese currency to appreciate ... and we continue to believe that we need a strong dollar,” French Finance Minister Christine Lagarde said after the talks in Istanbul.
In a joint statement, the G7 ministers also said there were “signs of a global economic recovery,” but added that there was “no room for complacency” and that fiscal stimulus measures by governments would stay in place.
“Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability,” the statement said.
The G7 finance ministers and central bank governors welcomed “China’s continued commitment to move to a more flexible exchange rate, which should lead to continued appreciation of the Renminbi [yuan] in effective terms and help promote more balanced growth in China and in the world economy.”
European finance ministers put pressure on the US this week ahead of the G7 talks to defend the dollar, which has weakened considerably as a tentative global economic recovery has taken shape.
Meanwhile, there have been calls for China to allow its currency, which is strictly controlled by the nation’s foreign exchange authorities, to appreciate — a move that would make Chinese exports more expensive.
US Treasury Secretary Timothy Geithner repeated the US strong-dollar mantra while saying restoring sustainable growth was the top priority.
“It’s very important to the United States that we continue to have a strong dollar,” Geithner said in a news conference after the G7 meeting in response to a reporter’s question about the weakness of the world’s main reserve currency.
“We recognize the dollar’s important role in the system conveys special burdens and responsibilities on the US,” he said.
“And we’re going to do everything necessary to make sure we sustain confidence,” he said, adding that Washington was committed “to make sure we bring our growth level back to sustainable conditions as soon as we have a recovery under way.”
“The important thing is the world is growing,” he said.
G7 finance chiefs also discussed moves to help a global economic recovery after the IMF said growth had resumed but the crisis was not over because of rising unemployment and a weak financial sector.
“No way can we say that the crisis is over” because unemployment is rising and the financial sector is weak, IMF managing director Dominique Strauss-Kahn said in a BBC World debate before the G7 talks in Turkey’s biggest city.
The G7 brings together the UK, Canada, France, Germany, Italy, Japan and the US, but has now been eclipsed by the G20, which includes major emerging markets such as Brazil, China, India and Russia.
Leaders at a G20 summit in the US city of Pittsburgh, Pennsylvania, last week agreed the wider grouping was the main forum for international economic cooperation.
Russian Finance Minister Alexei Kudrin also attended Saturday’s meeting and the talks were the first for Japan’s new finance minister, Hirohisa Fujii, seen as an experienced bureaucrat lacking in international experience.
The G7 talks come after the US — the world’s biggest economy — this week reported higher-than-expected unemployment figures and a setback in the recovery of its battered manufacturing sector.
US President Barack Obama last Friday said the job losses were “a sobering reminder that progress comes in fits and starts.”
Signs of recovery have pushed down the value of the dollar, which is traditionally seen on currency markets as a safe haven in tough economic times and whose global reserve status has been questioned.
The dollar was trading at 1.4572 to the euro in New York late last Friday.
The current state of the dollar has led some experts to conclude that Washington is allowing the currency to lose value as a way of boosting US exports by making them cheaper — a tactic that would weaken European exports.
The Taiwanese passport ranked 33rd in a global listing of passports by convenience this month, rising three places from last month’s ranking, but matching its position in January last year. The Henley Passport Index, an international ranking of passports by the number of designations its holder can travel to without a visa, showed that the Taiwan passport enables holders to travel to 139 countries and territories without a visa. Singapore’s passport was ranked the most powerful with visa-free access to 192 destinations out of 227, according to the index published on Tuesday by UK-based migration investment consultancy firm Henley and Partners. Japan’s and
NATIONAL SECURITY THREAT: An official said that Guan Guan’s comments had gone beyond the threshold of free speech, as she advocated for the destruction of the ROC China-born media influencer Guan Guan’s (關關) residency permit has been revoked for repeatedly posting pro-China content that threatens national security, the National Immigration Agency said yesterday. Guan Guan has said many controversial things in her videos posted to Douyin (抖音), including “the red flag will soon be painted all over Taiwan” and “Taiwan is an inseparable part of China,” while expressing hope for expedited “reunification.” The agency received multiple reports alleging that Guan Guan had advocated for armed reunification last year. After investigating, the agency last month issued a notice requiring her to appear and account for her actions. Guan Guan appeared as required,
Japan and the Philippines yesterday signed a defense pact that would allow the tax-free provision of ammunition, fuel, food and other necessities when their forces stage joint training to boost deterrence against China’s growing aggression in the region and to bolster their preparation for natural disasters. Japan has faced increasing political, trade and security tensions with China, which was angered by Japanese Prime Minister Sanae Takaichi’s remark that a Chinese attack on Taiwan would be a survival-threatening situation for Japan, triggering a military response. Japan and the Philippines have also had separate territorial conflicts with Beijing in the East and South China
A strong cold air mass is expected to arrive tonight, bringing a change in weather and a drop in temperature, the Central Weather Administration (CWA) said. The coldest time would be early on Thursday morning, with temperatures in some areas dipping as low as 8°C, it said. Daytime highs yesterday were 22°C to 24°C in northern and eastern Taiwan, and about 25°C to 28°C in the central and southern regions, it said. However, nighttime lows would dip to about 15°C to 16°C in central and northern Taiwan as well as the northeast, and 17°C to 19°C elsewhere, it said. Tropical Storm Nokaen, currently
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