Bank official denies gov't manipulation of yuan
(Bloomberg)
Updated: 2006-01-20 09:07

`Small Appreciation'

China on July 21 reset the yuan's value at 8.11 to the dollar, a 2.1 percent appreciation from the level where it had been held since 1995, and started managing its value against a basket of currencies including the euro and yen. It traded at 8.0673 to the dollar at 3:30 p.m. local time yesterday.

``The small appreciation is decided by the market,'' Ma said, when asked about the currency's movement since July 21. ``Market participants have different views than some outsiders.''

Ma, 56, was vice director of the central bank's State Administration of Foreign Exchange for four years until last March. In August, he was named executive vice president of the central bank's Shanghai office, which carries out market operations under guidance from Beijing headquarters.

Questioned on what his forecast for the yuan is this year, Ma responded: ``You need to ask the market.''

The central bank on Jan. 4 approved banks to start quoting and trading the yuan, ending its role as the sole price-setter for all yuan trades. The central bank now sets a daily reference rate for trading by taking an average of quotes from market makers. The yuan is allowed to trade 0.3 percent against the dollar either side of the daily rate.