Banking News
- Forex reform moving ahead: central banker
Date: 27-Nov-2007 Sources: (Xinhua Online)
THE government is progressing with foreign-exchange reform and the mechanism plays an important role in adjusting the nation's trade balance, central bank deputy governor Su Ning said yesterday.
The rate of the yuan also plays an important role in sustaining the nation's economic growth, Su said.
'The foreign-exchange mechanism will help improve the economic structure and lead to industry upgrading,'' he said.
European and U.S. officials have been urging China to allow it currency to appreciate faster to reduce global imbalances in trade they say are threatening manufacturing jobs.
China will consider widening the yuan's 0.5 percent daily trading limit if necessary and gradually allow the currency to move more freely, central bank governor Zhou Xiaochuan said in Cape Town, South Africa last week.
'The currency's gain will lead exporters to be less reliant on price competition and will force companies to be more competitive and use their resources more efficiently,'' said Li Huiyong, a currency analyst at Shenyin Wanguo Research and Consulting Co. in Shanghai.
Li said the central bank is likely to allow the yuan to strengthen at a faster pace, though its advance is likely to remain at less than 10 percent a year.
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