At the first formal Brazil, Russia, India, and China summit on June 16 in Yekaterinburg, Russia, reform of the international financial and monetary system topped the agenda of the heads of the world’s key emerging economies. Over the past several months, leaders from Russia, China, Brazil, and other countries have expressed concern regarding the value and stability of the dollar, and the world’s dependence on the U.S. currency. Russia, as the summit host and “ideological provocateur” of the group, has issued the most aggressive statements challenging the dollar and demanding an increased international role for its ruble. However, the cautious policy pronouncements from China, with its far greater economic weight and financial strength, warrant greater attention. Amidst the international rhetoric, Chinese policymakers have undertaken several small but significant steps to begin the internationalization of the renminbi, limit China’s reliance on the dollar, and impart their preferences on the international monetary system.
Issues & Insights Vol. 09 – No. 11
June 23, 2009