China rules out weaker yuan
Zhu Rongji says keeping to current policy is in country's interests and will help safeguard economic growth and stability
BEIJING - Chinese Premier Zhu Rongji has ruled out devaluing China's currency, saying Beijing's current policy is in the interests of the country, state press reported yesterday.
'To stick to the policy is in the interests of our country,' he said, according to Xinhua news agency.
'It has effectively safeguarded the country's economic growth and financial stability and won wide approval from the international community,' he added.
China received kudos for its refusal to devalue its currency during the Asian financial crisis in the late 1990s, when other countries in the region engaged in competitive devaluations.
The stability of the yuan and 'the sustained increase in foreign exchange reserves are major signs of the country's improving national strength and sustained and healthy economic development', said Mr Zhu, speaking at the State Administration of Foreign Exchange.
His comments came as US Treasury Under-Secretary John Taylor suggested that China's integration into the world economy boosted chances that the world's largest consumer market would end restrictions on its exchange rate over the longer term.
Since 1995, China has kept the yuan in a narrow trading band of around 8.3 against the US dollar, a move that keeps the price of its exports low, helping to fuel a US$199 billion (S$348.5 billion) trade surplus and attracting US$308 billion in foreign investment.
Its economy grew 8 per cent last year, more than three times the United States'.
In Washington, Mr Taylor said large economies that keep inflation tame, interest rates low and allow their currencies to float have the best chance of achieving long periods of stable growth.
'Over time, they will move towards more flexibility,' he said, when asked about China's exchange rate.
'It's really their decision as to how rapidly to move,' he added. -- AFP, Bloomberg News |
