Reuters
UPDATE - China wants yuan float against currency basket-FT
Wednesday April 21, 8:04 pm ET
(Adds details)
LONDON, April 22 (Reuters) - China's foreign exchange chief said Beijing no longer favoured a fixed exchange rate system and was planning to allow the yuan to fluctuate against a basket of currencies, but he did not give a timetable for the shift, the Financial Times reported on Thursday.
"We don't think that a fixed system is good. We think that a floating system is good," Guo Shuqing, head of the State Administration of Foreign Exchange control was quoted as saying.
The newspaper said Guo had told it that Beijing planned to introduce flexibility into its exchange rate as part of reforms to loosen capital controls and give play to market forces.
"This is an integrated, systemic approach. We have done a lot of research [on using a basket of currencies] for a long time. In the past we had such a system. The floating system will also have some reference to a basket [of currencies]," he said.
U.S. officials have been pressing China to revalue the yuan (renminbi) (CNY=CFXS), which is pegged at about 8.28 to the dollar, amid criticism that it is keeping Chinese exports unfairly cheap at the cost of U.S. manufacturing jobs.
Beijing has resisted pressure to revalue, saying it will make the yuan more flexible by introducing reforms according to its own timetable.
Guo had indicated Beijing would not re-peg the yuan at a higher level as he said it was not clear whether the yuan was undervalued, the newspaper reported.
Inflows of speculative capital from abroad were easing from an average of $12 billion a month in the first three months of the year to an estimated $11 billion this month, Guo said.
China's trade deficit in the first three months of the year, the possibility that capital flows would move towards recovering developed economies and expectations that the U.S. Federal Reserve would raise rates this year were also easing upward pressure on the yuan, he said. |
