LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
March 30, 2005 Wednesday
London Edition 1
SECTION: THE AMERICAS & ASIA-PACIFIC; Pg. 7
LENGTH: 355 words
HEADLINE: China rules out revaluation of the renminbi
BYLINE: By ANDREW BALLS and RICHARD MCGREGOR
DATELINE: BEIJING and WASHINGTON
BODY:
China will not revalue its currency to rectify bilateral trade imbalances, Zhou Xiaochuan, governor of the People's Bank of China, said yesterday - despite US pressure to use the exchange rate to make Chinese exports less competitive.
Mr Zhou used an interview with the People's Daily, the mouthpiece of the Communist party, to clarify the bank's monetary and economic policies amid continuing speculation of an imminent change in interest rates and the currency.
His remarks will reinforce views that China feels no sense of urgency to revalue its currency and that the government has not settled on a new exchange rate mechanism. China has been under pressure to revalue the renminbi - fixed to the US dollar for a decade - from Washington and Brussels, which say it gives Chinese exporters an unfair advantage.
Rob Nichols, US Treasury spokesman, said: "The administration strongly believes a flexible, market-determined exchange rate regime, along with free trade and free flow of capital, is best for large economies like China's." Many Chinese academics and officials are also pressing for a more flexible exchange rate, mainly because they believe the peg deprives the government of an independent monetary policy.
Mr Zhou stressed that China would adopt a more flexible exchange rate on its own timetable and was focused not on a one-off revaluation but on finding a mechanism to allow the renminbi to float more freely.
"China's exchange rate policy mainly takes into account the international balance of payments and overall relations with the world economy, rather than the trade surplus or deficit with individual countries," he said. "Our mission in the future is mainly to improve the renminbi exchange rate formation mechanism, rather than simply adjust the exchange rate."
China's trade surplus with the US was Dollars 162bn in 2004, according to Washington's figures, the biggest deficit the US has recorded with one country. But China's surplus with the world was only Dollars 32bn, according to Beijing's calculations.
The central bank governor also damped speculation that a further rate rise was under consideration.
LOAD-DATE: March 30, 2005
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
March 30, 2005 Wednesday
London Edition 1
SECTION: THE AMERICAS & ASIA-PACIFIC; Pg. 7
LENGTH: 355 words
HEADLINE: China rules out revaluation of the renminbi
BYLINE: By ANDREW BALLS and RICHARD MCGREGOR
DATELINE: BEIJING and WASHINGTON
BODY:
China will not revalue its currency to rectify bilateral trade imbalances, Zhou Xiaochuan, governor of the People's Bank of China, said yesterday - despite US pressure to use the exchange rate to make Chinese exports less competitive.
Mr Zhou used an interview with the People's Daily, the mouthpiece of the Communist party, to clarify the bank's monetary and economic policies amid continuing speculation of an imminent change in interest rates and the currency.
His remarks will reinforce views that China feels no sense of urgency to revalue its currency and that the government has not settled on a new exchange rate mechanism. China has been under pressure to revalue the renminbi - fixed to the US dollar for a decade - from Washington and Brussels, which say it gives Chinese exporters an unfair advantage.
Rob Nichols, US Treasury spokesman, said: "The administration strongly believes a flexible, market-determined exchange rate regime, along with free trade and free flow of capital, is best for large economies like China's." Many Chinese academics and officials are also pressing for a more flexible exchange rate, mainly because they believe the peg deprives the government of an independent monetary policy.
Mr Zhou stressed that China would adopt a more flexible exchange rate on its own timetable and was focused not on a one-off revaluation but on finding a mechanism to allow the renminbi to float more freely.
"China's exchange rate policy mainly takes into account the international balance of payments and overall relations with the world economy, rather than the trade surplus or deficit with individual countries," he said. "Our mission in the future is mainly to improve the renminbi exchange rate formation mechanism, rather than simply adjust the exchange rate."
China's trade surplus with the US was Dollars 162bn in 2004, according to Washington's figures, the biggest deficit the US has recorded with one country. But China's surplus with the world was only Dollars 32bn, according to Beijing's calculations.
The central bank governor also damped speculation that a further rate rise was under consideration.
LOAD-DATE: March 30, 2005
posted by Eastlaw at 2:11 AM
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