ECB's Lagarde Calls for Global Talks on Undervalued Chinese Currency
Quick Look
- ECB President Christine Lagarde urged global leaders to discuss the undervaluation of the Chinese currency, citing it as a factor in global economic imbalances.
- She noted Europe's struggle to compete with cheaper Chinese goods and dismissed the idea of a new Plaza Accord.
AI-generated summary
Why It Matters
European Central Bank President Christine Lagarde highlighted global economic imbalances, partly driven by the undervaluation of the Chinese currency, which affects Europe's competitiveness.
European Central Bank President Christine Lagarde on Monday urged global leaders to discuss undervaluation of the Chinese currency as a facet of the imbalances endangering the global economy.
Europe has struggled to compete with China in sectors it used to dominate, such as high-end cars, partly due to Chinese goods being cheaper.
“That’s the situation as it is, which justifies completely the fact that there has been, and I hope there will be, further discussions of excessive imbalances, which include a currency aspect to it, between the G7 leaders and beyond,” Lagarde told an event in Brussels.
Lagarde dismissed the notion of a new Plaza Accord to strengthen the yuan, however, saying the 1985 international deal to weaken the dollar was struck when “times were different”.
Open Questions
- Will G7 leaders discuss currency issues?
- What specific actions might be considered?
