Chinese central banker says yuan close to equilibrium - Xinhua
January 28, 2013 3:42 AM EST
The Chinese currency is trading at a level "relatively close" to equilibrium with the U.S. dollar, a senior central bank official told Xinhua, citing slowing growth in China's massive foreign reserves as evidence the yuan is coming into balance.
The yuan has lost importance as a source of political and diplomatic friction in the past year, although U.S. presidential candidate Mitt Romney did threaten to impose tariffs if he were elected to offset what he said was a persistent undervaluation.
China's foreign reserves grew at their slowest pace in five years in 2012 - a sign the value is close to equilibrium, Yi Gang, central bank vice governor, told the state news agency on the sidelines of the Davos forum in Switzerland.
"This means that the central bank doesn't have to intervene in the market on a large scale, and the slower pace of growth in our foreign exchange reserve is a good thing," he said.
Yi also said the Chinese government's promotion of the internationalisation of the yuan was proceeding, although many observers have said they doubt it can be used as a major reserve currency given China's current account restrictions.
"What we are doing now is nothing but remove discrimination against the renminbi and let it act just as other reserve currencies," Yi told Xinhua, adding that the pace of adoption would depend on the market.
"I would be actually pleased to see people have more confidence in the renminbi and choose it over other currencies thanks to a more sophisticated market, better implementation of China's monetary policy, China's macroeconomic stability and social stability, and stronger rule of law," he added.
Analysts have pointed to two-way movements in daily yuan trading as a sign the yuan is close to fair value.
For many years after China depegged the yuan from the dollar in 2005 and instituted a trading band, the currency steadily appreciated. It was temporarily and unofficially repegged beginning in the summer of 2008 to help stave off the looming global financial crisis.
(Reporting By Lucy Hornby; editing by Jane Baird)
Most Popular Slideshows
- ‘Sons of Anarchy’ Season 7 Finale Spoilers: Kurt Sutter On Ending The Biker Series And Picking The Right Song For The Final Ride
- Prince Charles’ Wife Camilla Parker-Bowles In Drug Scandal - Reports
- Prince Harry Kissing Mystery Blond, Cressida Bonas & Camilla Thurlow Are Distant Memory
- St. Louis Rams 28, Seattle Seahawks 26 [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Galaxy Note 4 vs Redmi Note 2 vs iPhone 6: Samsung in Danger with Depressing Q3
- iOS 8 Jailbreak Release Date Likely this October 2014 with Pangu not Evad3rs Firming Up as Creator
- Apple Inc. (AAPL) Stock Set to Soar Beyond $100 Despite Decline After New iPad Launch
- iPhone 6 vs Nexus 6 vs Galaxy Note 4: Performance and User Interface Comparison
- Fappening: Message Board Posters Belittle Nude Photo Leakers As D-Listers Seeking Publicity
- Russia Beefs Up Gold Reserves To Offset Heat of Sanctions And Undercut Dollar
- Fappening: Lindsay Clubine, Wife Of Boston Red Sox Pitcher Clay Buchholz, & George Sampson Of Britain’s Got Talent, Are The Latest Victims Of Celebrity Nude Leaks