June 1, 2006
China should speed up yuan adjustment: US official
By Gernot Heller
BERLIN (Reuters) - China should speed up adjustment of its
yuan exchange rate policy to reflect market conditions, U.S.
Treasury Deputy Secretary Robert Kimmitt said on Thursday.
China's central bank on Wednesday reaffirmed its commitment
to deepen foreign exchange reform to make the yuan more
flexible while keeping the currency on an even keel.
"We'd like to see that ... the Chinese move their currency
more quickly to reflect the underlying market conditions,"
Kimmitt told reporters during a visit to the German capital.
Earlier on Thursday, Chinese Foreign Ministry spokesman Liu
Jianchao said the choice of Goldman Sachs Chairman Hank Paulson
to succeed John Snow as U.S. Treasury Secretary would not have
an impact on China's currency policy.
"We have already expressed our policy many times on the
renminbi (yuan) exchange rate. We will still use these policies
to deal with the renminbi exchange rate," Liu told a regular
news briefing when asked about Paulson's nomination.
In its monetary policy report for the first quarter of
2006, the People's Bank of China said it would take innovative
steps to bring the country's balance of payments surplus into
balance and would press ahead with making the yuan convertible.
The yuan, or renminbi (RMB), has risen just over 1.0
percent since it was revalued by 2.1 percent in July and
depegged from the dollar to float within managed bands.
That is not enough to satisfy foreign critics clamoring for
a much stronger yuan. But the central bank said there had
already been a "remarkable" increase in the flexibility of the
Kimmitt said he thought the U.S. economy was strong and
would remain strong, but he would like to see an improvement in
global economic conditions.
"We'd like growth, particularly demand and consumption, to
pick up, especially in Japan and in Europe," he said.
A business survey showed on Thursday that growth in euro
zone manufacturing rose to its strongest in almost six years
last month, buoyed by improving demand in Germany and France,
but that inflation risks are mounting.
Kimmitt added that he was concerned about "protectionism
sentiments" in Europe and the United States.