China: No change to yuan policy
(Reuters)
Updated: 2005-12-06 15:39

The yuan's tight daily trading band against the U.S. dollar of 0.3 percent is appropriate, and any change in the yuan will be decided by the floating regime, not the government, the official Financial News on Tuesday quoted the government as saying.

Chinese banknotes on display in Beijing. [AFP]

"Market operations since the reform of the exchange rate regime show that the trading range is appropriate," the newspaper quoted an official at a unnamed top government agency as saying.

"It has not only satisfied the trading demand of market participants, but also guarantees the basic stability of the renminbi exchange rate," the official was quoted as saying.

China revalued the yuan, also called the renminbi, by 2.1 percent against the dollar in July and scrapped the yuan's decade-long peg to the dollar.

The authorities describe the new regime as a managed float, and the central bank has intervened to keep the currency on a tight leash against the dollar.

"Any change in the renminbi will be decided by the floating mechanism, not another adjustment by the government," the newspaper said.

The authorities have repeatedly ruled out another discrete adjustment of the exchange rate, but the German magazine WirtschaftsWoche reported on Friday that China was preparing to revalue the yuan by 7.2 percent against the dollar on January 1.