China says fixed yuan to stay for long time
Reuters, 12.02.03, 6:00 AM ET
BEIJING, Dec 2 (Reuters) - China's policy of keeping its yuan currency fixed to the U.S. dollar should stay for a long time, and future reforms should be based on exchange rate stability, the country's foreign exchange chief has said.
"The managed floating exchange rate system is suitable for China's national conditions and should be maintained for a long time with no change," the official Xinhua news agency on Tuesday quoted Guo Shuqing, head of the State Administration of Foreign Exchange, as saying. Guo said the policy that keeps the yuan, also called the renminbi, pegged at about 8.28 to one dollar, had its shortcomings but added that reform would be a complicated process.
"Reform of the exchange rate mechanism should take exchange rate stability as its premise, that is to say, we must actively promote the basic stability of the renminbi within a rational, balanced level over a long period of time," Guo was quoted as saying.
Guo's remarks, which Xinhua said were made "recently", come as China is trying to deflect criticism from the United States and other trading partners that it has kept the yuan artificially low to give its exports an edge against products from other countries.
Copyright 2003, Reuters News Service
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