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Central bank adviser backs yuan rate policy

www.chinanews.cn 2005-07-05 14:58:02

(Agencies)

BEIJING, July 5 - A Chinese central bank adviser has said that monetary
policy should stay stable in the near future and that China's economic
growth and inflation were optimally matched, the Financial News said on
Tuesday.
Further credit tightening was unnecessary and probably harmful given that
consumer price inflation had dipped below two percent, said Yu Yongding,
a researcher who is also a member of the central bank's monetary policy
committee.
In the first half of this year, economic growth and inflation had been
optimally matched, he said.
China's central bank reiterated its intention to keep monetary policy and
its yuan currency stable in a statement on Friday, released after a
quarterly meeting by its monetary policy committee.
The People's Bank of China also said it would seek to keep prices and
economic growth basically stable and offered no hint of the currency
revaluation that some of China's trading partners have been seeking.
Yu also gave no hint on the timetable of yuan reform. Indeed, the
uncertainty was a good thing, he said.
Uncertainty over any move on the yuan helped curb the volume of
speculative money coming into the country as a bet on revaluation and
thereby created a better external environment for currency reforms.
Investors have been speculating that China may start pegging its yuan to
a basket of currencies, rather than just the dollar, or widen its trading
band as early as this year as part of the country's long stated plan to
gradually liberalise its currency.
Such a move, analysts say, would allow the currency to appreciate under
current economic conditions.

          ��China to maintain yuan stability: central bank (2005-07-02)
          ��CNOOC's bid may ease yuan's pressure (2005-07-01)
          ��China pursues gradual reform of RMB rate (2005-06-26)
          ��China trying to stabilize RMB value (2005-06-08)
          ��Mundell said China should keep RMB exchange rate unchanged
(2005-06-06)
          ��RMB revaluation would have little impact on US trade deficit
(2005-06-03)
          ��Mundell discussed the RMB exchange rate (2005-05-31)
          ��China not to hastily publicize RMB reform (2005-05-18)

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