Freeing RMB will create seismic shift in markets

Australia's central bankers tend to be a phlegmatic bunch. Allow me to quote you two sentences – the top and tail in fact – from a recent speech by Reserve Bank deputy governor Philip Lowe.

"The internationalisation of the renminbi (RMB) – and China's associated move towards a liberalised capital account and more flexible exchange rate regime – has the potential to create a seismic shift in the international monetary and financial landscape."

"The internationalisation of the RMB – and the changes that accompany it could ultimately prove to be as transformative for global capital markets as was the earlier opening of China's borders for the global trading system."

Lowe was referring to China's admission to the World Trade Organisation in 2001 – a development which kick-started Australia's biggest ever-mining boom.

It took 15 years of negotiations before China was admitted to the WTO.

 

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Max Walsh

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Max Walsh was for many years one of Australia’s top economic and political commentators, highly regarded as a journalist, author and broadcaster. Throughout his career, Max was involved in all dimensions of the media industry, which has encompassed positions with two of Australia’s largest publishing companies and television networks.

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