Yuan steady despite pressure
Updated: 2007-08-01 10:15
The yuan remained relatively stable despite anticipated pressure from the United States while its Treasury Secretary Henry Paulson visits Beijing.
The yuan's central parity rate was 7.5737 against the US dollar yesterday, up slightly from Monday's 7.5824.
During his visit, Paulson was scheduled to meet top Chinese officials to discuss issues ranging from trade to the opening up of China's financial sector and yuan flexibility.
Last week, some US lawmakers managed to pass legislation by the Senate Finance Committee that would allow firms to appeal for anti-dumping duties against countries with "fundamentally misaligned" currencies.
"The Senate bill opens a door for the US to exert pressure on China to revalue its yuan faster," said Chen Xingdong, chief economist of BNP Paribas Peregrine Securities.
"The US government is in a dilemma."
Currency dealers said the yuan's relative stability this week is a result of a technical correction after it surged to close at 7.55 yuan against the dollar last Wednesday. They said the yuan's movement is likely to stall and remain stable in the coming days.
The US side has pressed China to revalue the yuan, but the strategy will not work, Chen said.
"The Paulson visit will not achieve much in this respect," he told China Daily.
China has held steady the yuan's exchange rate reform will go steadily but not hastily.
"China has its own tempo in revaluing the yuan," said Zhao Xijun, a researcher with Renmin University of China.
China's goal remains making the yuan more flexible, but under a controlled and gradual progress, he said.
The US has demanded that the yuan's revaluation must be faster, but critics have said this could be disastrous to the Chinese economy.
If the yuan was revalued by a bigger margin, rising costs would become unaffordable for many sectors, Chen said.
"It will create great uncertainty for the Chinese economy."
|
|