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UPDATE 1-France wants China involved in currency discussions

Published 10/05/2010, 05:51 AM
Updated 10/05/2010, 05:52 AM

* Lagarde sets out France G20 agenda

* Wants China in currency discussions

* Sees more commodities markets regulation

By Gleb Bryanski

MOSCOW, Oct 5 (Reuters) - China should be included in global discussions on foreign exchange rates, French Economy Ministry Christine Lagarde said on Tuesday, setting out agenda for France's presidency in the G20 which starts in mid-November.

"It is not appropriate at this point in time that China is never involved in discussions about currencies," Lagarde told VTB Capital's Russia Calling forum.

China -- which has come under criticism from some countries such as the United States for keeping its yuan currency relatively weak -- seems ready to discuss how to avoid "erratic" exchange rate variations, a French presidential palace source said on Monday. [ID:nLDE69329B]

Euro area policymakers urged Beijing on Tuesday to allow an "orderly, significant and broad-based appreciation" of its currency but said Chinese Prime Minister Wen Jiabao had differed with them. [ID:nLDE6940IX]

Lagarde said Russia should have more say on the global financial stage as well.

"It is not appropriate that my colleague (Russian Finance Minister) Alexei Kudrin only enters the room for particular segments of the discussion at G8 meetings. It all has to be thought through," Lagarde added, noting that France had no concrete proposals on the issue yet.

During the presidency of the group of top developed and emerging nations, France will seek to follow up from current incumbent South Korea on financial supervision and development.

"I am particularly thinking about the fight against non-cooperative jurisdictions in areas such as tax and also prudential standards," Lagarde said.

France wants to open G20 discussions on a new global monetary system that will be more inclusive, as well as reform of commodities markets and of international institutions.

Lagarde said she saw major discrepancies between the "real" and "virtual" markets in commodities such as oil, agricultural products, metals and rubber. She said France had in mind a reform of market regulation and price setting mechanisms.

The regulation should stretch to emerging commodities markets such as the market for CO2 emission quotas, she added.

Lagarde also said France wanted to create an institutional framework for better coordination between international organisations such as International Labour Organisation, World Health Organisation and World Trade Organisation.

(Editing by Patrick Graham)

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