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China will widen yuan's band but no timeline set
Source: Bloomberg News |
September 10, 2012, Monday
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Print Edition
Print Edition
CHINA will widen the yuan's trading band at some point, a central bank official has said, declining to give a timetable for any move.
Guo Jianwei, deputy director of the People's Bank of China's second monetary policy department, also said the central bank will allow the trading band to play a bigger role in the country's exchange-rate mechanism.
"In the past when speculation was heavy, it was very hard for China to widen the band too much," Guo said at an international investment forum in Xiamen, southeast China's Fujian Province, at the weekend.
"But with the current balanced level of the exchange rate and stable economic growth, the room to allow the band to play a bigger role in the reform of the exchange-rate mechanism is growing," Guo said.
China in April doubled the yuan's trading band against the US dollar to 1 percent either side of a daily reference rate, the first rise since 2007, as speculation dwindled that the currency would appreciate amid slowing growth.
Asked when the central bank might widen the band, Guo said, "I am talking about the trend, but it's hard to spell out the exact timing."
Guo said such a development was an "obvious" option.
"The direction of China's exchange rate is moving toward a market-oriented exchange-rate system."
Guo also said some short-term speculative funds are leaving China.
"In general, capital outflows are not large," he said. "We have done an analysis, there is a bit of outflow, but it is far from being a big problem."
Guo Jianwei, deputy director of the People's Bank of China's second monetary policy department, also said the central bank will allow the trading band to play a bigger role in the country's exchange-rate mechanism.
"In the past when speculation was heavy, it was very hard for China to widen the band too much," Guo said at an international investment forum in Xiamen, southeast China's Fujian Province, at the weekend.
"But with the current balanced level of the exchange rate and stable economic growth, the room to allow the band to play a bigger role in the reform of the exchange-rate mechanism is growing," Guo said.
China in April doubled the yuan's trading band against the US dollar to 1 percent either side of a daily reference rate, the first rise since 2007, as speculation dwindled that the currency would appreciate amid slowing growth.
Asked when the central bank might widen the band, Guo said, "I am talking about the trend, but it's hard to spell out the exact timing."
Guo said such a development was an "obvious" option.
"The direction of China's exchange rate is moving toward a market-oriented exchange-rate system."
Guo also said some short-term speculative funds are leaving China.
"In general, capital outflows are not large," he said. "We have done an analysis, there is a bit of outflow, but it is far from being a big problem."
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