Wen: Renminbi rate reform a gradual process
(Xinhua)
Updated: 2005-10-15 13:57

Chinese Premier Wen Jiabao said in Beijing Friday that the reform of the RMB exchange rate is a process of gradual improvement.

Wen told Rodrigo Rato, Managing Director of the International Monetary Fund (IMF), that to gradually establish a market-based and well-managed floating exchange rate system and to keep the RMB exchange rate basically stable at a reasonable and balanced level is the "unalterable direction" and goal of China's exchange rate reform.

Premier Wen Jiabao (left) meets Rodrigo Rato, Managing Director of the International Monetary Fund, in Beijing October 14. Wen said the reform of the RMB exchange rate is a process of gradual improvement. [Xinhua]

Wen said China will continue to advance the exchange rate reform with the principles of independent initiative, controllability and gradual progress and the reform will also proceed from the necessity to maintain the development and stability of China's economy and finance.

On July 21, the People's Bank of China, China's central bank, announced that China's currency, the RMB yuan, will be traded at arate of 8.11 to the US and the yuan to US dollar pegging system is switched to a basket of foreign currencies.

Wen said such a move marked a significant step and a substantial progress in China's exchange rate reform.

He said China has, by taking the step, improved the formation system of the exchange rate and adjusted the exchange rate within a reasonable band.

Wen said the yuan to US dollar pegging system has been switched to a managed floating exchange rate regime based on market supply and demand with reference to a basket of foreign currencies.

Since July 21, the yuan has appreciated by nearly 2 percent against the US dollar.

Wen said such an adjustment is taken with the consideration of China's trade and economic development and Chinese companies' affordability and adaptive capacity.