Chinese think tank suggests yuan flexibility

Source: AFP

Chinese think tank suggests yuan flexibility

Tuesday, December 4, 2007
AFP

SHANGHAI -- China should increase the flexibility of its currency, a state think tank was quoted as saying Monday, arguing a stronger yuan would be in the nation's interest.

"China should further increase the flexibility of yuan's exchange rate and appropriately widen the yuan trading band in 2008," the State Information Centre said in a report published by the China Securities Journal.

The daily trading band of the yuan -- 0.5 percent on either side of a reference rate against the dollar set by the central bank at the start of each session -- should be doubled to one percent next year, the think tank said. It said under current circumstances, a stronger yuan would do China more good than harm as it would make imports of technologies, capital equipment and resources cheaper and help overseas expansion by domestic firms.

The State Information Centre is affiliated with the National Development and Reform Commission, the nation's top planner. China freed its currency from a peg to the U.S. dollar in mid-2005, and has since allowed it to rise by more than 10 percent against the greenback, while its has weakened against the euro.



Read more: http://www.chinapost.com.tw/business/2007/12/04/133464/Chinese%2Dthink.htm