Speech Summary Some Implications of the Internationalisation of the Renminbi
Opening Remarks to the Centre for International Finance and Regulation Conference on the Internationalisation of the Renminbi
The speech considers the implications of the internationalisation of the renminbi (RMB) on China and from a global perspective. It suggests that the currency's internationalisation has the potential to create a ‘seismic shift’ in the international monetary and financial landscape.
The speech considers progress in internationalising the RMB thus far and notes that this process is inextricably linked to China's transition towards capital account liberalisation and a more flexible exchange rate. It concedes that though the process has been gradual, further liberalisation of the capital account market could be one of the ‘really significant events’ in global capital markets.
Moving on, it acknowledges that the process of the currency's internationalisation cannot be predicted and outlines why the challenges facing China are greater than other countries which have undertaken a similar process. Consideration is also given to the implications and benefits of RMB internationalisation for Australia. And in conclusion, the speech proposes that although financial deregulation is an inherently risky process, the rewards are substantial if it is done well.