China's central bank on Thursday said it would increase the
"floating flexibility" of yuan, also known as renminbi or RMB,
while keeping it basically stable at a reasonable
equilibrium.
The People's Bank of
China reiterated in a report after its quarterly monetary
policy meeting that China will continue to improve its exchange
rate mechanism.
China should continue to implement a prudent monetary policy, it
said.
The yuan strengthened to 8.0250 against the U.S. dollar on Monday,
the highest level since its July 21 revaluation, but weakened
marginally to 8.0296 on Friday.
The Chinese currency has gained more than 3 percent since July last
year.
U.S. Senators Charles Schumer and Lindsey Graham are in China to
discuss growing concerns in the U.S. Congress about China's trade
practices, currency policy and intellectual property rights.
The visit comes as a March 31st deadline nears for the Senate to
vote on a bill written by Schumer and Graham that would impose a
27.5 percent tariff on Chinese goods. The bill is designed to
counter what the Senators call China's artificial currency exchange
rates that benefit Chinese manufacturers at the expense of American
producers.
In response to a journalist's question on whether China would
revalue its currency, Chinese Premier Wen Jiabao said a week ago
that the "RMB now boasts the room and capacity to float up or down
on its own in line with the current mechanism and market
changes."
(Xinhua News Agency March 24, 2006)