Exchange rate range to adjust at proper time
(China Daily/Xinhua)
Updated: 2005-08-05 05:48

"Gradualism" is the principle applied in the reform of the renminbi exchange rate regime, rather than in the adjustment of the renminbi exchange rate, it said.

"The reform is focused not on the quantitative adjustment of the renminbi exchange rate but on the improvement of the renminbi exchange rate regime."

According to the report, reform of the renminbi exchange rate is designed to serve China's fundamental interests and benefit the national economy, enterprises and people's lives in general.

China's gross domestic product (GDP) and per capita wealth in terms of US dollars went up correspondingly after the yuan's appreciation by about 2 per cent, the central bank said in its report.

The appreciation has spurred imports and reduce exports, which may rein-in the runaway growth of China's trade surplus and foreign exchange reserves, and gradually help fulfil the basic balance of exports and imports as well as the balance of international payments, the bank said.

This will lead to more efficient use of resources, alleviate pressure on the renminbi, make monetary policy more independent, and financial control more active and effective, as well as maintaining a balanced overall economy, it said.

The yuan's appreciation will have a positive impact upon people's lives, as it will lower the prices of imported goods in the market and lead to cheaper overseas tours for the Chinese people, it said.