The summit will reaffirm avoid competitive devaluation. In the previous G20 finance ministers and central bank governors meeting, policymakers repeatedly promised to avoid competitive devaluations, not for competitive purposes peg. We expect the leaders will reaffirm this commitment, and this will significantly reduce the likelihood of Japanese foreign exchange intervention, possibly even against the euro and sterling downside is a certain limit. Despite the Fed rate hike expectations, China will not be the first to let go devaluation. We believe that the probability of the RMB exchange rate before and after the summit, sharp correction is unlikely.
The summit will support the expansion of the use of SDR, which will boost the internationalization of the RMB. China will be included in discussions about the G20 agenda SDR, it began to publish data to the SDR-denominated foreign exchange reserves, and was recently approved by the World Bank issued the first batch of SDR bonds in China's interbank bond market. These efforts will be recognized by the leaders, and is considered part of the international monetary system reform. RMB added SDR basket will come into effect in October. Development of SDR market has important strategic significance for the internationalization of the RMB.