China Must Give Up Peg on Dollar, Ex-Central Bank Adviser Says
- China should clearly tell market its exchange rate policy
- Yuan remains under depreciation pressure around Lunar New Year
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A word of warning from a former adviser to the People’s Bank of China: Free the yuan from its dollar shackle and “clearly” inform the market of your exchange-rate policy to avert more damaging rounds of depreciation.
“It’s meaningless to peg the yuan against the dollar,” Li Daokui, currently a professor of Tsinghua University, said in an interview at the World Economic Forum in Davos, Switzerland on Wednesday. “The world is not in need of another currency that’s pegged against the dollar, it needs a relatively stable currency that’s pegged against a basket of currencies.”