Wednesday, July 21, 2010

PBoC Official Says China Will Allow Yuan To Weaken If Necessary

(RTT News)

The People’s Bank of China will allow the country’s currency to depreciate against the U.S. dollar to support exporters if necessary, a central bank adviser said.

In an interview with Japan’s daily Asahi Shimbun, published Wednesday, PBoC official Zhou Qiren said the central bank cannot allow the exchange rate to fluctuate too quickly, as China’s export-oriented companies will not be able to cope with it. What is most important is to show exporters and importers that the exchange rate of renminbi does indeed fluctuate, he added.

In June, the Chinese government said it would loosen its exchange rate regime, although it ruled out a large one-off revaluation. The yuan has gained around 0.8% against the dollar since then. Read more