In The News

IMF Staff Urges No Rush to Add China Yuan to Currency Basket

David Chance and Krista Hughes August 12, 2015
China is pressing the International Monetary Fund to designate the yuan as a reserve currency, but IMF staff have urged a delay until September 2016. “The IMF board is scheduled to make a decision in November on whether to include the yuan in a basket of currencies comprising dollars, euros, pounds and yen, although the decision could be pushed back if policymakers decide they need more...

Cheaper Chinese Currency Has Global Impact

Jon Hilsenrath and Brian Blackstone August 12, 2015
Rising debt, a slowing economy and battered stock markets prompted China to devalue the yuan. “By devaluing the yuan, Chinese authorities are turning to a controversial growth-boosting tactic whose effects by their nature reverberate far and wide,” reports the Wall Street Journal. “Chinese officials framed their action as a modest move toward a more market-sensitive currency, something U.S....

Renminbi’s Flexible Rate – 10 Years On

Jennifer Hughes July 21, 2015
China surprised currency traders by announcing it is replacing its decade-long currency peg with a flexible exchange-rate, reports Jennifer Hughes for Financial Times. The renminbi has climbed steadily in value since 2005, reducing trade deficits and tension. “For China-watchers, the renminbi’s gradual moves towards full convertibility with long pauses along the way have become the classic...

Eurozone Strikes Greek Deal With Tough Conditions

Paul Taylor and Renee Maltezou July 13, 2015
Greece accepted tough conditions – tougher than those rejected by Greek voters in a referendum – in exchange for aid from fellow members of the Eurozone. Greek leaders must submit public policy proposals and spending plans to bailout monitors. Aid is contingent on Greece meeting “a tight timetable for enacting unpopular reforms of value added tax, pensions, budget cuts if Greece misses fiscal...

Central Banks: Printing Money Delays Domestic Structural Reforms

Will Hickey June 30, 2015
Countries are waging currency wars in competition over export markets, jobs and foreign investment – printing money, taking on more debt, rather than pursuing serious and needed domestic structural reforms. “Without deeper structural reforms that encourage consumption, innovation and a secure safety net ensuring certainty, the democratic governments will eventually flounder and citizens will vote...

If Greece Defaults, Imagine Argentina, But Much Worse

James B. Stewart June 26, 2015
The best option for Greece is conceding on Europe’s demands for austerity, argues James B. Stewart for the New York Times, to avoid the economic havoc of Argentina, which has defaulted on debt multiple times. A Greek default would be worse than Argentina’s. Greece could expect a run on banks of a much higher magnitude and confusion over currency with a steep drop in purchasing power. Argentina’s...

Three Perilous Options for Greece Facing Europe

Gideon Rachman June 23, 2015
The Greek debt crisis may well destroy the European single currency, argues Financial Times columnist Gideon Rachman: Greece’s debts are immense, and no logical plan is in place for repayment or rapid reforms. If Greece remains in the EU, the nation would be a weak and struggling partner. More EU concessions for Greece would undermine governments in Ireland and Portugal that have endured...