Rate measures to help banks reduce risks
By Zhang Dingmin (China Daily)
Updated: 2005-09-26 05:29

"The market performance since the exchange rate forming mechanism reform demonstrates that the current floating range for the renminbi against the US dollar is appropriate," the spokesman said. "It not only meets the trading needs of market, but helps safeguard the basic stability of the renminbi exchange rate."

On Saturday, Jin Renqing, China's finance minister, told an annual meeting of the International Monetary Fund (IMF) the Chinese Government has been consistently pursuing an independent and responsible policy approach in its exchange rate regime.

China still faces international pressure from trade partners, which complain the renminbi is undervalued to give Chinese exports unfair advantage.

"The reformed exchange rate regime and more flexible renminbi exchange rate have strengthened the government's ability to manage the macro economy and improved the prospect of rapid, sustained and balanced growth," he said.

In another development, Governor of the People's Bank of China Zhou Xiaochuan said on Saturday that major industrial countries should abandon the outdated mentality and behavior of trade protectionism.

Speaking at the twelfth meeting of the International Monetary and Financial Committee, the policy-making body of IMF, Zhou pointed out that protectionist sentiments are mounting in some industrial countries because of concerns over the competitive pressures arising from emerging markets, and some countries have even inappropriately politicized economic issues.

"Such behaviour not only harms the global economy, but also undermines the principle of fair competition and the spirit of amicable co-operation that the international community has been working so hard to promote," he said.

(China Daily 09/26/2005 page1)