Foreign Exchange News
- Government to push yuan convertibility
Date: 2-Feb-2007 Sources: (Shenzhen Daily)
THE government will gradually push forward yuan convertibility on the capital account and continue improving the yuan's exchange-rate mechanism, a senior foreign exchange regulator said Wednesday.
Deng Xianhong, deputy chief of the State Administration of Foreign Exchange, also said balancing China's international payments is a key economic task.
His remarks during a radio news report are a reiteration of China's foreign-exchange policy.
Citing Japan's experience after the stock market bubble there burst, Guan Tao, a deputy head of State Administration of Foreign Exchange's general affairs department, said the continued rapid growth of China's foreign-exchange reserves could cause economic fluctuations, according to the report.
The radio report cited Guan as saying China could invest its foreign-exchange reserves in the financial sector.
Deng said China should strengthen management over short-term capital inflows. The radio report also cited him as saying China should continue structural reforms to boost domestic demand and cut China's reliance on exports for growth to curb expansion in its foreign-exchange reserves.
China's foreign-exchange reserves are the world's largest. At the end of 2006, they totaled US$1.06 trillion. Last year, China's trade surplus grew 74 percent to US$177 billion.
Premier Wen Jiabao said earlier this month that China would actively explore and expand the channels and methods for using foreign-exchange reserves, Xinhua reported.
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