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| A Chinese bank clerk counts renminbi bank
notes. China pledged Monday to continue to keep the renminbi
exchange rate stable (newsphoto) |
China pledged Monday to continue to keep the renminbi exchange rate
stable.
The People's Bank of China's Monetary Policy Committee decided at its
fourth quarter meeting that the fundamental stability in the renminbi's
exchange rate should be maintained, while efforts are made to improve the
exchange rate forming mechanism, the bank said in a statement.
The central bank's rhetoric is basically unchanged from a stance it has
repeatedly stated -- that the country will not revalue its currency, also
known as the yuan, under foreign pressure, but will improve the
flexibility of its exchange rate regime.
China has been under pressure from its trading
partners who complain that the renminbi is undervalued , a view the Chinese
Government has refuted
.
But speculation for the yuan appreciating remains strong in the
marketplace, and speculative funds have been flowing into China, which has
alerted Chinese regulators.
The State Administration of Foreign Exchange, the nation's foreign
exchange regulator, sent a stern warning to currency speculators earlier
this month, pledging heavy penalties on any illegal foreign exchange
activities that threatens to disrupt the normal order of the markets.
"We want to solemnly warn illegal speculators that the State
Administration of Foreign Exchange and other law-enforcement
departments will never let any behaviour go that may disrupt order in
the foreign exchange market," the administration said.
The administration has found signs of currency speculation in areas
such as trade, foreign direct investment and the property market, it said.
The growing foreign exchange inflows have put pressure on the central
bank, since it has to purchase excess dollars to enforce a narrow floating
band of the renminbi, subsequently increasing local money supplies at a
time of already rapid loan growth.
(China Daily) | 
Updated: 2004-12-28 10:54