Monday, 21 June 2010

Chinese Central Bank Set to Allow Yuan to Rise

A bank clerk stacks up renminbi banknotes. Photo: The Times

THE TIMES: China signalled on Saturday it was ready to allow its currency to resume its rise, ending a 23-month-long peg to the US dollar and stifling critics who claim the country’s exports have benefited from the state-engineered weakness of the renminbi.

In a carefully worded statement, deliberately issued on a weekend evening when global markets were closed, the People’s Bank of China indicated that it was ready to allow its currency to resume its natural rise.

It said: “The global economy is gradually recovering. The recovery and upturn of the Chinese economy has become more solid with enhanced economic stability.”

The typically opaque statement, released just days before the G20 summit in Canada, continued: “It is desirable to proceed further with reform of renminbi exchange rate regime and increase the renminbi exchange rate flexibility.”

Among the most remarkable aspects of the statement was its lack of detail. China is anxious to avoid being seen as bowing to pressure from the United States, especially as members of Congress have heightened their criticism of what they say is Beijing’s manipulation of its currency. >>> Jane Macartney, Beijing | Saturday, June 19, 2010