China's premier rejects call for faster currency rise

Beijing - Chinese Premier Wen Jiabao on Sunday rejected pressure from the United States and other nations for a faster appreciation of China's currency. "A country's exchange rate policy and its exchange rates should depend on its national economy and economic situation," Wen told reporters at the end of China's 10-day annual parliament.

Wen said he opposed "finger-pointing" by nations which claim the relatively low value of China's yuan has made its exports cheaper and fueled its large trade surplus.

He said China planned to "further improve the yuan exchange rate formation mechanism and keep the yuan exchange rates basically stable at a reasonable and balanced level."

The stability of China's currency had "played an important role in facilitating the recovery of the global economy from the worst financial crisis in decades," Wen said.

The real exchange rate of the yuan rose by 14.5 per cent against the dollar between July 2008 and February 2009, he said.

Last week, China said it expected the slow recovery of its exports from the global financial crisis to take up to three more years.

In his economic report to the congress, Wen outlined measures designed to stimulate domestic demand and reduce the nation's dependence on exports.

China has more or less pegged its currency to the US dollar since the middle of 2008, but the euro has increased in value against the yuan around 20 per cent since the beginning of 2009.

Source: Earth Times.
Link: http://www.earthtimes.org/articles/show/313978,chinas-premier-rejects-call-for-faster-currency-rise.html.