Economy

China reiterates no one-off moves in RMB exchange rate reform

(Xinhua)
Updated: 2010-06-21 10:59

GRADUAL PROCEEDING

However, the central bank ruled out a one-off yuan appreciation, saying "at present, there is no basis for big swings or changes in the value of the yuan."

Large-scale appreciation would hurt the country's economic and financial stability, it said, adding that a gradual adjustment was necessary to give enterprises time to adjust their business structures.

Li Daokui said, generally speaking, China had seen relatively balanced international payments, and the yuan would not record a one-off big appreciation, but would be flexible in two directions.

China's decision to proceed with the reform of the yuan exchange rate was still down the road set in 2005, the statement said, adding China would rely more on a basket of currencies to determine the exchange rate, given its close ties with a number of trade partners.

Trade between China and the European Union in the first five months of the year accounted for 16.3 percent of China's total foreign trade volume. That volume between China and the United States, East Asian nations and Japan accounted for 12.9 percent, 10.1 percent and 9.4 percent, respectively, according to the statement.

Ding Zhijie, professor at the University of International Business and Economics, said the central bank was sending a clear signal that China would continue to steadily advance reform of the RMB exchange rate formation mechanism following the principles of being independent, controllable and gradual.