Central bank on IMF's China report
(Xinhua)
Updated: 2005-11-18 09:04

An official with the People's Bank of China (POC) said Friday that some analysis made by the International Monetary Fund (IMF) in its staff report for 2005 Article IV consultation with China may not reflect the latest developments.

The IMF published the report on November 18, the second time since China resumed its legal status in the organization in 1980.

According to the Article IV of the IMF convention, the IMF consults with all member governments regularly to know about their macro-economic operation and monitor their economic policies.

The official said that the Chinese government has held annual consultations with the IMF since 1980. The report, written by IMF staff following the consultation, reflects the judgment and views of IMF staff on the economic and financial situation in relevant countries.

Because statistics used in the report are from before July 2005, some analysis probably needs to be updated, the official said.

Talking about China's macro-economic and financial situation, the official said that China's economy has been growing stably and rapidly in general, but some in-depth problems still exist, including too fast fixed-asset investment growth, imbalanced imports and exports, increasing trade disputes and challenges brought by forex reserve growth.

The central bank will continue the stable monetary policy, enhance structural adjustment through marketization means and stably push forward the reform on forming mechanism of the exchange rate of Renminbi.

There has been no big change in China's economic development and finance market, the official said.

As for China's exchange rate mechanism reform, he said that China made an important step and substantive progress in this regard on July 21 2005.

Generally speaking, this reform was smooth, and from the global reaction, the result was positive and objective, he said.

Keeping the exchange rate basically stable at a reasonable and balanced level and the establishment of a manageable floating exchange rate regime on the basis of market supply and demand are China's persistent direction and goal of reform, he said.

"This is a process of gradual advancement and improvement," he 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, the official said.

He said that China will further promote reforms to produce an RMB exchange rate mechanism that is more flexible to changes in market demand and supply, and the government is willing to take advices and suggestions from various parties.

On July 21, China's central bank announced that China's currency, the RMB, would be traded at a rate of 8.11 to the US dollar. The yuan to US dollar pegging system was switched to a basket of foreign currencies.