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Yuan move won't alter US trade gap
(Agencies)
Updated: 2005-07-24 10:17
Thailand's central bank governor said the move signaled China's willingness
to adopt market reforms, and its trade minister said Thai exports should
improve.
The announcement Thursday said Beijing would switch to a system in which the
yuan, instead of being fixed in value against the dollar, will be allowed to
fluctuate in a limited daily trading range of 0.3 percent vs the U.S. dollar,
taking into account the market fluctuations of a basket of unspecified foreign
currencies.
The new system restricts the currency's daily movement, but some economists
say that over the next two years, the yuan could gain more grounds against major
world currencies depending China's economic performance.
In trading Friday on China's tightly managed foreign exchange market, the
yuan strengthened by about 2 percent to 8.11 to the U.S. dollar from 8.277 where
it had been set for 11 years. That meant one yuan rose in value by about
one-quarter of a U.S. cent to 12.33 cents.
The central bank spokesman said China began allowing the yuan's value to
fluctuate slightly in 1994, but tightened controls after the 1997 Asian
financial crisis, when a wave of speculation and devaluations was unleashed by
Thailand's move to loosen its currency controls.
"Along with the gradual weakening impact of the Asian financial crisis, in
recent years China's economy has experienced sustained, steady and rapid
development, economic structural reform has witnessed continuous deepening (and)
new progress has been made in the financial field," the spokesman
said.
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 | | | China scraps yuan peg to US dollar | | |  | | | Taiyuan explosion kills one, injures 33 | | |  | | | Typhoon Haitang floods coastal areas | | |
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