Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (15465)	11/11/2004 1:58:34 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

China´s central bank leans towards wider yuan trading band - report Thursday, November 11, 2004 6:50:47 AM afxpress.com China's central bank leans towards wider yuan trading band - report BEIJING (AFX) - China's central bank is more likely to widen the yuan's trading band rather than set a peg against a basket of currencies if it chooses to revalue, the 21st Century Business Herald reported, citing an unnamed source. "The central bank is now more disposed to widening the trading range of the yuan against the US dollar ...(This) would increase the elasticity of the yuan's exchange rate," said a source close to senior officials at the People's Bank of China (PBoC), the country's central bank. Last year, China considered pegging the yuan to a weighted basket of currencies, but the plan eventually was dropped, according to the report. For the past 10 years, China's currency has been pegged at about 8.3 yuan to the dollar though it trades in a narrow band around that rate Recently, policy makers have signalled the possibility of moving towards a more flexible exchange rate system while maintaining a generally stable currency Overseas pressure for China to increase the value of the yuan is mounting. Chinese officials have conceded there is a need to revalue the currency but they have stressed they need time. China missed the perfect timing to expand the trading band against the dollar in June amid fears of a hard landing of the Chinese economy, the newspaper's source said. "The central bank needs to look for another opportunity," the source added The source said pegging the yuan to a currency basket would not be an appropiate option Since more than 90 pct of China's foreign trade is calculated in dollars, it would make no sense to introduce a basket strongly weighted towards the US currency, the source said But if the dollar is too lightly weighted in the basket, it would cause trading in the yuan to fluctuate too drastically against the dollar, it added