Source: CCTV.com
12-06-2008 11:52
Special Report: 5th China-U.S. SEDThe value of the yuan against the Greenback usually draws its fair share of attention in economic discussions with the latest talks at the SED proving no exception.
The Chinese currency has appreciated by around 20 percent since depegging in July 2005, but the rate of appreciation has slowed since June this year.
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| The value of the yuan against the Greenback usually draws its fair share of attention in economic discussions with the latest talks at the SED proving no exception. |
Before the opening of the SED, the yuan's exchange rate had dropped for three consecutive days. The yuan ended at the bottom of its trading band against the US dollar on Thursday. Chinese Commerce Minister Chen Deming said the recent depreciation of the yuan was normal.
Chen Deming, Chinese Commerce Minister, said, "The recent, small fluctuation of the yuan against the dollar was completely normal. I'd call it the dollar strengthening, rather than the yuan depreciating, since the RMB exchange rate to the Euro and Japanese yen is comparatively stable."
Chen said the exchange rate is influenced by trade, but is mainly decided by the balance of payments. In the past three years, the yuan has gained more than 20 percent versus the US dollar. And he stressed that China won't rely on a weaker yuan to boost exports.
Wang Guogang, Deputy Director of Instifute of Finance & Banking, Cass, said, "Overseas investors are now withdrawing money from China to help the US market with the financial crisis. Given such an urgent situation, they are in a hurry to exchange their yuan for dollars, even at a cheaper rate. Secondly, the Chinese currency appreciated quickly in the first half of this year, by nearly 7 percent. It's too fast compared with that of before. So it's normal to fall after a surge. But the depreciation is definitely not a long-term trend."
Experts point out the yuan will continue to depreciate for a while, but it will not last for long. For one thing, China's economic growth is faster than that of the US, Europe and Japan. For another, China's major economic data is still positive, including its foreign currency reserves and its balance of payments.
The yuan rebounded against the dollar on Friday. The central bank set the mid-point of the yuan's exchange rate at 6.8482 versus one US dollar.
Editor:Zhang Pengfei
