EAC, SADC Governors Meet in Dar to Discuss Chinese Currency

By TZ Business News Staff.

The Chinese currency Renminbi, also called the Yuan, has this year attracted special attention in two of Africa’s main trading blocks—Southern African Development Community (SADC) and the East African Community (EAC).

Fourteen central bank governors accompanied by financial analysts and experts from the nations of Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe meet in Dar es salaam, Tanzania, on Monday, June 20, 2016 to discuss among other issues the effect of the Yuan on SADC and the EAC following its adoption by the International Monetary Fund (IMF) and the World Bank as a medium of international trade settlements.

A statement issued by the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) in Harare says Governors of central banks from the MEFMI region will meet for their annual Forum to be held at the Bank of Tanzania in Dar es Salaam on Monday, 20 June 2016.

The theme for the Forum is “Implications of the IMF Adoption of Chinese Yuan as Part of the Special Drawing Rights Basket of Currencies”. The theme is highly relevant to the MEFMI region, particularly the central banking community as they are the custodians of foreign exchange reserves and facilitators of international trade settlements, the statement says.

Dar es Salaam, Tanzania, with Central Bank twin-towers.
It is MEFMI’s hope that both the presentations and the discussions will provide the unique opportunity for sharing views on the inclusion of the Chinese Yuan into the basket of reserve currencies of the IMF and World Bank, the statement signed by Ms Gladys Siwela says.

The Forum will be held back to back with the Bank of Tanzania Golden Jubilee celebrations on 22 June 2016.

The Dar es Salaam event will be attended by up to 40 officials comprising 14 central bank Governors and Deputy Governors from the MEFMI region, technical experts from Investec Asset Management and the Bank for International Settlements (BIS) in Basel, Switzerland. Investec is the financial partner for the event.

The Governors’ Forum is one of the Executive Fora series on MEFMI’s annual calendar of events meant to assist in developing and sustaining a crop of more informed policy makers in the region. Each event is uniquely crafted in an effort to address critical issues that impact and affect the role of the central banks in the macroeconomic and financial management of our region. The Forums are also used to come up with a common understanding of both prevailing and emerging economic issues.

The International Monetary Fund (IMF) announced in December, 2015 it had decided the Chinese currency renminbi (RMB) would be included in the basket of currencies which make up the IMF’s Special Drawing Right, or SDR.

This is the first time in over 15 years that the list of currencies comprising the SDR has been changed, the IMF said. The change was agreed by the IMF’s Executive Board following a regular review of the currencies which make up the SDR basket.

“The Executive Board’s decision to include the RMB in the SDR basket is an important milestone in the integration of the Chinese economy into the global financial system. It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China’s monetary and financial systems,”said the IMF’s Managing Director, Christine Lagarde.

“The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which, in turn will support the growth and stability of China and the global economy,” she added. China is a major trading partner of the EAC and SADC regions.

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