China Business

Oct 28, 2005

Further yuan appreciation called "megatrend"

BEIJING - Further appreciation of the Chinese yuan will be a "megatrend" in the future, but uncertainties will still exist on the way, Wu Xiaoling, vice governor of the People's Bank of China (PBoC), the country's central bank, was quoted by the China Securities Journal as saying on October 26.

Wu made the remark while attending a signing ceremony for three conventions on banking industry self-discipline.

The appreciation of yuan will follow a zigzag course, because the market and enterprises will adapt to the appreciation gradually,

Wu said. He also promised that the central bank has no plan to raise the float range of the yuan exchange rate against the US dollar this year.

Whether to expand the float range depends on the market's capacity to endure the change, Wu said. Recently the central bank announced in a circular that it would raise the float range of the yuan exchange rate against non-US dollar currencies, such as the yen and euro, from the previous 1.5% to 3%. However, the float range of the yuan's exchange rate against US dollar, which stands at 0.3%, remained unchanged.

(Asia Pulse/XIC)

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