Exchange rate reform to proceed, says bank
Source: Xinhua |
June 20, 2010, Sunday
|
Print Edition
Print Edition
THE People's Bank of China, the nation's central bank, has decided to further reform the yuan exchange rate regime to make the Chinese currency more flexible, a spokesman said yesterday.
The decision was made in view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the spokesman said.
In further proceeding with the reform, continued emphasis would be placed on reflecting market supply and demand with reference to a basket of currencies.
The exchange rate floating bands will remain the same as previously announced in the inter-bank foreign exchange market, according to the spokesman.
He said China's external trade is becoming more balanced.
The ratio of current account surplus to GDP, after a notable reduction in 2009, has been declining since the beginning of 2010.
"With the BOP account moving closer to equilibrium, the basis for large-scale appreciation of the RMB exchange rate does not exist," the spokesman said.
The central bank will further enable the market to play a fundamental role in resource allocation, promote a more balanced BOP account, maintain the RMB exchange rate basically stable at an adaptive and equilibrium level, and achieve macroeconomic and financial stability in China, the spokesman said.
China has moved into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies since July 1, 2005.
The spokesman said the RMB exchange rate regime reform has been making steady progress since 2005, producing the anticipated results and playing a positive role.
When the current round of international financial crisis was at its worst, the exchange rate of a number of sovereign currencies to the US dollar depreciated by varying margins.
"The stability of the RMB exchange rate has played an important role in mitigating the impact of the crisis, contributing significantly to Asian and global recovery, and demonstrating China's efforts in promoting global rebalancing," the spokesman said.
The gradual recovery of the global economy and upturn of the Chinese economy has become more solid with enhanced economic stability.
It is desirable to further reform the RMB exchange rate regime and increase the RMB exchange rate flexibility, said the spokesman.
The decision was made in view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the spokesman said.
In further proceeding with the reform, continued emphasis would be placed on reflecting market supply and demand with reference to a basket of currencies.
The exchange rate floating bands will remain the same as previously announced in the inter-bank foreign exchange market, according to the spokesman.
He said China's external trade is becoming more balanced.
The ratio of current account surplus to GDP, after a notable reduction in 2009, has been declining since the beginning of 2010.
"With the BOP account moving closer to equilibrium, the basis for large-scale appreciation of the RMB exchange rate does not exist," the spokesman said.
The central bank will further enable the market to play a fundamental role in resource allocation, promote a more balanced BOP account, maintain the RMB exchange rate basically stable at an adaptive and equilibrium level, and achieve macroeconomic and financial stability in China, the spokesman said.
China has moved into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies since July 1, 2005.
The spokesman said the RMB exchange rate regime reform has been making steady progress since 2005, producing the anticipated results and playing a positive role.
When the current round of international financial crisis was at its worst, the exchange rate of a number of sovereign currencies to the US dollar depreciated by varying margins.
"The stability of the RMB exchange rate has played an important role in mitigating the impact of the crisis, contributing significantly to Asian and global recovery, and demonstrating China's efforts in promoting global rebalancing," the spokesman said.
The gradual recovery of the global economy and upturn of the Chinese economy has become more solid with enhanced economic stability.
It is desirable to further reform the RMB exchange rate regime and increase the RMB exchange rate flexibility, said the spokesman.
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