Baker Institute expert available to comment on Chinese renminbi’s rise to one of the world’s main reserve currencies

EXPERT ALERT

David Ruth
713-348-6327
david@rice.edu

Jeff Falk
713-348-6775
jfalk@rice.edu

Baker Institute expert available to comment on Chinese renminbi’s rise to one of the world’s main reserve currencies
Green: ‘China cannot be content with the renminbi’s new status’  

HOUSTON – (Dec. 2, 2015) – The International Monetary Fund (IMF) on Monday approved the Chinese renminbi as one of the world’s main central bank reserve currencies, joining the dollar, euro, yen and pound. This move will benefit the international economic system, according to an international economics expert at Rice University’s Baker Institute for Public Policy.

Credit: thinkstockphotos.com/Rice University

“The IMF’s decision to include the Chinese currency in the special drawing rights (SDR) basket of reserve currencies looks like a move with only an upside,” said Russell Green, the Baker Institute’s Will Clayton Fellow in International Economics and an adjunct assistant professor of economics at Rice. “Essentially the SDR basket is functionally meaningless except to convey prestige. Yet China must continue to liberalize to complete the inclusion process. Through its decision, the IMF signaled that it intends to accelerate and ease the renminbi’s entry into the floating exchange-rate system. Moving China in that direction will benefit the international economic system.”

Green is available to comment on the IMF’s decision and its implications for China and the United States.

“China cannot be content with the renminbi’s new status, but instead must continue to liberalize the financial system,” Green said. “It must abolish financial regulations such as the fixed exchange rate and interest-rate controls. This will level the playing field for China’s competitors. Perhaps more importantly, it should address its domestic financial vulnerabilities before it becomes a cross-border systemic issue. If the SDR nudges them forward, we should all welcome the IMF adding the renminbi to the SDR basket.”

For more information or to interview Green, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

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Related materials:

Green biography: http://bakerinstitute.org/experts/russell-green.

Founded in 1993, Rice University’s Baker Institute ranks among the top 10 university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blogs.chron.com/bakerblog.