China’s Yuan Might Be At ‘equilibrium’ Level: Wen
The Yuan has gained 30 per cent in value in real terms since 2005 and has moved up and down since September in trading on a Hong Kong market for non-deliverable currency contracts, Premier Wen Jiabao said.
“That shows that the renminbi exchange rate may possibly have reached an equilibrium exchange rate,” Mr. Wen said at a news conference at the end of China’s annual legislative session.
Mr. Wen pledged to create a more flexible, market-based exchange rate system, saying, “We welcome greater elasticity of the renminbi exchange rate.”
Still, his comments are likely to frustrate Washington and other governments that say China’s currency controls keep the Yuan undervalued, giving its exporters an unfair advantage and swelling its multibillion-dollar trade surplus. Some American lawmakers are pressing for higher tariffs on Chinese goods if Beijing fails to act faster.
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