PBOC Official Says U.S. Election Won’t Impact Yuan Level
The U.S. presidential election won’t have an impact on the value of the yuan in foreign-exchange markets, a Chinese central bank official said.
China has sole decision-making power on its exchange-rate policy and the yuan’s appreciation against the dollar in recent weeks has been driven by market demand, He Jianxiong, director- general of the People’s Bank of China’s international department, said in an interview in Mexico City yesterday.
“Ultimately, it’s the market that determines the yuan rate, and it is close to its equilibrium level,” He, formerly an International Monetary Fund Executive Director for China, said after the meeting of officials from the Group of 20. “The U.S. election won’t have much impact on the yuan level. China has a full power in making its own policy.”
Group of 20 finance chiefs pledged to move toward more flexible currency regimes in a statement issued yesterday that highlighted policy makers’ commitment to avoid competitive devaluations as global growth sours. The G-20 refrained from singling out China’s currency after it has risen 0.7 percent versus the dollar in the past month, the third-best performance among 25 most-actively traded emerging-market currencies. For the past three months, the yuan has gained 2 percent.
Forwards Rate
Twelve-month non-deliverable yuan forwards are trading 1.9 percent lower than the spot rate in Shanghai after the discount widened to 2 percent on Oct. 23, the biggest since 2009, on bets the currency’s appreciation will reverse following this week’s U.S. elections.
The weaker yuan forwards rate reflected “short-term price discrepancies in different markets,” He said.
U.S. presidential candidate Mitt Romney has said he will label China as a “currency manipulator” if elected. PBOC’s He declined to comment on Romney’s stance, saying “we don´t know who will win yet.”
The U.S. Treasury’s latest report on exchange-rate policies, issued May 25, said there is evidence the yuan “remains significantly undervalued” and further appreciation is warranted.
To contact the reporter on this story: Belinda Cao in Mexico City at lcao4@bloomberg.net
To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net
Zhou Foresees Yuan Convertibility as Calls Rise for China Reform
Andrew Harrer/Bloomberg
China’s central bank governor said convertibility will be the next step in the overhaul of the exchange-rate system as calls grow for the nation’s new leadership to deepen changes in the economy to sustain growth.
China’s central bank governor said convertibility will be the next step in the overhaul of the exchange-rate system as calls grow for the nation’s new leadership to deepen changes in the economy to sustain growth. Photographer: Andrew Harrer/Bloomberg
The U.S. election campaign is almost over and the rhetoric will be packed away for another four years. Bloomberg's Stephen Engle reports on the U.S. businesses in China who say Obama and Romney's criticism of China is hurting U.S. interests.
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