Britain will support renminbi, the Chinese currency, to become part of the International Monetary Fund's Special Drawing Right (SDR) basket currencies, said Lord Mayor of the City of London Alan Yarrow on Friday.
"Britain will certainly support (RMB become a SDR basket currency). We think the world needs another reserve currency, and we think we need renminbi," Yarrow told reporters before his trip to China.
Yarrow tuned positively on China's renminbi pricing mechanism improvement and other financial market reforms. He stressed that the currency fluctuation is one of the features of a marketized currency, and during the process of reforms, clarity and transparency of economic information is very important.
"How can you have a country which has done so many reforms in such a short period of time? All will be working at the same speed? You can't, and there is going to be some sort of deficiency in some areas. So the transparency and analytics have to be geared up. And I think when the market feels it get a better idea of what they are, then they will have more comforts on where the currency is going to be," said Yarrow.
"Clarity and transparency is much easier, so I think as things progress, the renminbi will find itself a different value, this is no doubt," he said.
He also thought the slowing down of Chinese economic growth is on the natural course.
After achieving marvelous long period of rapid growth over the past decades, it would be normal for China to witness relatively lower growth, noted Yarrow.
"You cannot have the economy growing at 10 or 11 percent or at 7 percent without bottleneck period. It might be education, it might be skills or it might be finance, that sort of value growth is very difficult to sustain, and we all know that, and the Chinese authority also know that," he said.
And as an emerging and young equity market as China has, the short-term turmoil and volatility that China's equity market has experienced currently is part of the feature that all emerging markets have, said Yarrow.
Yarrow will lead a business delegation to pay an official visit to the Chinese mainland and Hong Kong from Sept. 16 to Sept. 25, helping to make sure London and Britain remains the global partner of choice for China when it comes to financial and professional services.
The role of Lord Mayor of the City of London has existed for over 800 years, and today the Lord Mayor's primary function is to act as an ambassador for Britain's financial and professional services industry.
