Читать книгу The Political Economy of the BRICS Countries - Группа авторов - Страница 25

A related issue in this context is the choice of exchange rate regime in these countries. The IMF’s exchange rate classification system groups India, South Africa, and Brazil under the floating exchange rate regime while that of the Russian ruble is branded as free floating (Table 3). Although Chinese RMB is classified by the IMF as ‘other managed arrangement’, China has been seen widely as a currency manipulator by the global community. A recent report of the US Treasury commented:

“(A)fter engaging in one-way, large-scale intervention to resist appreciation of the renminbi (RMB) for a decade, China’s recent intervention in foreign exchange markets, tightened capital controls, and increased discretion over setting the daily fixing rate of the RMB have likely prevented a disorderly currency depreciation that would have had negative consequences for the United States, China, and the global economy” (US Treasury, 2017).

Exchange rate movements are reflected in Table 4. While both South African rand, and Indian rupee showed two-way movements, the Russian ruble has bouts of instability. Of late, Brazilian real too showed volatility. The Chinese yuan after remaining almost constant for a long time started appreciating slightly during 2006–2013; since then, however, it has stared depreciating.

Table 4:Exchange rate movements and current account balances in BRICS countries.

Note: For the purpose of calculating exchange rate movements, exchange rates have been calculated with the home country’s currency as the numeraire; e.g. in calculating Yuan’s exchange rate, it is expressed as USD per one RMB.

Source: Calculated from exchange rate data available from Federal Reserve Bank of St. Louis (https://fred.stlouisfed.org).

A key difference between these economies is the extent of current account balance. Three countries, viz., Brazil, India, and South Africa, have been consistently having current account deficit since 2008. China and Russia, on the contrary, have been experiencing current account surplus. Of course, in case of Russia the extent of current account surplus has come down in tune with fall in oil prices. In the case of China too, the amount of surplus has come down since the global financial crisis and associated efforts toward ‘rebalancing’, whereby China has been repeatedly counseled by the global community to increase its consumption and reduce savings.⁶ Former US Fed Chairman Ben Bernanke is the chief exponent of this view, who in a lecture delivered Chinese Academy of Social Sciences in 2006 commented,

“China today is running substantial trade and current account surpluses. These external surpluses are caused in part by China’s remarkably high saving rate. Because China’s national saving rate is even higher than its rate of domestic investment, the country has excess funds to lend in the global capital market; it follows from the balance-of-payments accounts that China’s net lending abroad (or its acquisition of foreign assets) equals the country’s current account surplus. A large portion of this lending finances foreigners∈ purchases of Chinese net exports (the trade surplus). High household saving and the corresponding low level of consumption in China contribute to the trade surplus by depressing the demand for imports and by forcing domestic firms to look abroad for markets” (Bernanke, 2006).

This has profound implications for the trade cooperation among the BRICS countries.