"China has not been included in the SDR basket and should be,” said Professor Mundell, predicting that the renminbi is likely to be central to the IMF SDR review in 2011. Previous article ~ *** Economist Robert Mundell (layed groundwork for Euro) joins UAE's Central Bank
Interview with Robert Mundell on November 19, 2010 - Add Renminbi to IMF Reserve
China's currency has strengthened to the stage where it is "almost de facto convertible" and should be included in the international reserve basket held by the IMF, Nobel Prize-winning economist Robert Mundell said in this interview with the HKTDC prior to his appearance at the Asian Financial Forum, 17-18 January 2011.
Video ~ http://www.hktdc.com/info/webcast/v/en/en/1X04AS1N/Nobel-Economist-Mundell-Add-Renminbi-To-IMF-Reserve.htm
Nobel Laureate to Speak at January Asian Financial Forum
Nobel Prize-winning economist Robert Mundell says China’s currency has strengthened to the stage where it is "almost de facto convertible” and should be included in the international reserve basket held by the International Monetary Fund (IMF).
"The world’s theoretical currency is the Special Drawing Rights (SDR) of the IMF, a basket of major currencies that includes the US dollar, the euro, the pound sterling and the yen. China has not been in this and should be,” said Professor Mundell, predicting that the renminbi is likely to be central to the IMF SDR review in 2011.
"Because of its great strength and because China is the biggest exporter in the world and number-two power in the world by country, the Chinese currency can’t be excluded,” he said in an exclusive interview with the Hong Kong Trade Development Council (HKTDC).
The interview took place in advance of Professor Mundell’s trip to Hong Kong for the Asian Financial Forum (AFF). AFF 2011 is organised by the HKTDC and the Hong Kong Special Administrative Region (SAR) Government.
The event, 17-18 January 2011, will address Asia’s expanding role in the global economy under the theme “Asia: Reshaping the Global Agenda.”
Nobel Prize Winner, Professor Mundell won the Nobel Prize in 1999 for his work in monetary dynamics and optimum currency areas, which laid the groundwork for the introduction of the euro. He told the HKTDC that he believes the current problems facing the Eurozone are related to fiscal issues within relatively poor nations in southern Europe.
"I think there’s a lack of emphasis and stress on the importance of budget balance for countries,” he said. “It may be possible in the future for one, two or three of those countries to have some sort of restructuring, but I think that will take place within the context of the euro itself.”
Asked whether the Hong Kong currency’s peg to the US dollar will remain, Professor Mundell said there is no cause for removing the link unless real monetary instability developed in the United States. He said the other case for de-linking “would be if the Chinese mainland moved toward complete convertibility, in which case there would not be any problem for the Hong Kong dollar if it was fixed to the US dollar or the renminbi.”
AFF 2011 Speakers, Workshops
Professor Mundell will be among the distinguished speakers at AFF 2011, which will focus on major issues, challenges and opportunities facing Asia and the mainland in particular.
The forum will offer market intelligence and insights along with networking for a wide range of professionals, including bankers, institutional investors, fund managers, business leaders, senior executives and regional policymakers.
In addition to discussions about the renminbi as the next global currency, the forum will address such topical issues as how the renminbi could become the next global currency and green concepts as an engine for growth.
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