G-7 conditionally agrees to include Chinese currency for international trade

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DRESDEN: Finance ministers and central bank chiefs of the Group of Seven major industrial nations agreed Friday that the China-led Asian Infrastructure Investment Bank should be managed under internationally competitive standards on lending and other operations.

The G-7 call came as the officials wrapped up their three-day meeting in Dresden, eastern Germany, the same day. No joint statement was released.

At a concluding press conference, German Finance Minister Wolfgang Schaeuble, who chaired the meeting, said the G-7 countries hope that the AIIB will be successful, while urging the planned new bank to adopt the same high management and lending standards as those employed by existing international financial organizations such as the World Bank.

At a separate press conference, Finance Minister Taro Aso also indicated that Japan will continue to demand transparency in AIIB’s management. “I explained Japan’s position” at the G-7 meeting, he said.

Of the G-7 members, Britain, France, Italy and Germany are among the 57 founding members of the AIIB, which China hopes will be set up by the end of this year, while Japan, the United States and Canada have refrained from participating in the bank.

The officials talked about China’s request that its currency, the yuan, be added to the International Monetary Fund’s currency basket to determine the value of the special drawing rights (SDR), an international reserve asset.

Schaeuble told the press conference that the G-7 will in principle welcome the yuan’s addition if China, the world’s second-largest economy by gross domestic product, meets the IMF’s standards on currency and capital transactions.

The IMF is expected to make a decision in autumn. The SDR basket currently comprises the dollar, the euro, the yen and the pound. It is reviewed every five years.