Sunday, February 19, 2006
Central bank: Market forces to drive yuan
chinadaily.com.cn
the central bank has repeatedly ruled out another administered change, saying the managed float it introduced at the time of the July revaluation will allow the forces of supply and demand to gradually determine the yuan's rate.
'Making interest rates and the foreign exchange rate market-oriented to reflect supply/demand changes in the market has always been a goal that we have pursued,' Wu told Caijing, an influential business magazine.
While some people have argued that the yuan should be allowed to appreciate further, Wu said it was difficult to assess correct levels of the currency and that what was needed were moves to make the yuan more market-driven.
Caijing released the text ahead of publication on Monday.
Her comments came after she told Reuters last Tuesday that the yuan's faster pace of appreciation this year had been the result of market forces.
'I think this is the result of market operations and what we want is to let the market mechanism, based on supply and demand, play a role, she said.
The yuan can theoretically rise or fall by 0.3 percent a day against the dollar but, to Washington's frustration, it has so far moved only a fraction of that range in daily trading.
The White House, facing political pressure from a record US trade deficit, renewed its call last week for Beijing to let the yuan trade more freely, something it said was in China's own interest.
The yuan closed at 8.0483 per dollar on Friday. It has risen just 0.76 percent since the revaluation.
the central bank has repeatedly ruled out another administered change, saying the managed float it introduced at the time of the July revaluation will allow the forces of supply and demand to gradually determine the yuan's rate.
'Making interest rates and the foreign exchange rate market-oriented to reflect supply/demand changes in the market has always been a goal that we have pursued,' Wu told Caijing, an influential business magazine.
While some people have argued that the yuan should be allowed to appreciate further, Wu said it was difficult to assess correct levels of the currency and that what was needed were moves to make the yuan more market-driven.
Caijing released the text ahead of publication on Monday.
Her comments came after she told Reuters last Tuesday that the yuan's faster pace of appreciation this year had been the result of market forces.
'I think this is the result of market operations and what we want is to let the market mechanism, based on supply and demand, play a role, she said.
The yuan can theoretically rise or fall by 0.3 percent a day against the dollar but, to Washington's frustration, it has so far moved only a fraction of that range in daily trading.
The White House, facing political pressure from a record US trade deficit, renewed its call last week for Beijing to let the yuan trade more freely, something it said was in China's own interest.
The yuan closed at 8.0483 per dollar on Friday. It has risen just 0.76 percent since the revaluation.
