China official plays down yuan shift

BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank's currency policy as well as mounting expectations of a rise in the yuan's exchange rate. Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People's Bank of China to describe its currency stance.



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China official plays down yuan shift

BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank's currency policy as well as mounting expectations of a rise in the yuan's exchange rate.

Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People's Bank of China to describe its currency stance.

In its third quarter monetary policy report, the central bank failed to refer to keeping the yuan "basically stable at a reasonable and balanced level" when discussing the outlook for the exchange rate.

Asked whether the PBOC was heralding a return to the gradual appreciation of the yuan against the dollar seen from July 2005-July 2008, Chen told Reuters: "I don't think the central bank meant to say that."

Chen, however, said the yuan should reflect movements in major international currencies, which was also part of the PBOC's policy formulation.

China is coming under growing international pressure to let the yuan rise. Its manufacturers have been gaining market share at the expense of rivals in countries whose currencies have risen against the falling dollar, to which the yuan is pegged.

But, speaking on the sidelines of a forum, Chen said his ministry was not worried about rising appreciation expectations.

Turning to China's trade, Chen said there was only a small chance that exports would resume year-on-year growth by the end of 2009.

Many private economists, by contrast, expect positive growth in November or December because of the low base of comparison in 2008. Exports in October were 13.8 percent lower than a year earlier.

Chen also said a leap in China's trade surplus to $24 billion in October from $12.9 billion in September did not constitute a new trend.

(Reporting by Aileen Wang and Alan Wheatley; Editing by Alex Richardson)

(c) Reuters 2009. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

China official plays down yuan shift

BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank's currency policy as well as mounting expectations of a rise in the yuan's exchange rate. Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People's Bank of China to describe its currency stance.



137334
China official plays down yuan shift

BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank's currency policy as well as mounting expectations of a rise in the yuan's exchange rate.

Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People's Bank of China to describe its currency stance.

In its third quarter monetary policy report, the central bank failed to refer to keeping the yuan "basically stable at a reasonable and balanced level" when discussing the outlook for the exchange rate.

Asked whether the PBOC was heralding a return to the gradual appreciation of the yuan against the dollar seen from July 2005-July 2008, Chen told Reuters: "I don't think the central bank meant to say that."

Chen, however, said the yuan should reflect movements in major international currencies, which was also part of the PBOC's policy formulation.

China is coming under growing international pressure to let the yuan rise. Its manufacturers have been gaining market share at the expense of rivals in countries whose currencies have risen against the falling dollar, to which the yuan is pegged.

But, speaking on the sidelines of a forum, Chen said his ministry was not worried about rising appreciation expectations.

Turning to China's trade, Chen said there was only a small chance that exports would resume year-on-year growth by the end of 2009.

Many private economists, by contrast, expect positive growth in November or December because of the low base of comparison in 2008. Exports in October were 13.8 percent lower than a year earlier.

Chen also said a leap in China's trade surplus to $24 billion in October from $12.9 billion in September did not constitute a new trend.

(Reporting by Aileen Wang and Alan Wheatley; Editing by Alex Richardson)

(c) Reuters 2009. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

No double-dip US recession

The pace of the recovery in the US economy remains sluggish but Mr Strauss-Kahn does not believe there will be a double-dip recession. -- PHOTO: AFP

THE International Monetary Fund's managing director, Dominique Strauss-Kahn, said on Friday the pace of the recovery in the US economy remains sluggish but he does not believe there will be a double-dip recession.

He also said China's economic stimulus is helping to rebalance its economy towards relying more on domestic demand but it still needs to let its currency rise over time.

In October, the IMF raised its US growth outlook to 1.5 per cent in 2010 but Mr Strauss-Kahn said that forecast could be on the pessimistic side.

'Our forecast has that, not only in the United States but also for the rest of the world, 2010 will be a year of recovery,' Mr Strauss-Kahn told a news conference in Singapore where he was attending an Asia Pacific Economic Cooperation (Apec) meeting.

'I must say, in some respects, we had been a little pessimistic because growth has resumed a little earlier than expected, by one quarter or so.'

He said the dollar had remained resilient throughout the global crisis but most Asian currencies were undervalued and reiterated calls for the Chinese yuan to be revalued. 'China's economy in the coming years will be focused on domestic growth and the value of renminbi will have to be increased,' he said. -- THOMSON REUTERS

No double-dip US recession

The pace of the recovery in the US economy remains sluggish but Mr Strauss-Kahn does not believe there will be a double-dip recession. -- PHOTO: AFP

THE International Monetary Fund's managing director, Dominique Strauss-Kahn, said on Friday the pace of the recovery in the US economy remains sluggish but he does not believe there will be a double-dip recession.

He also said China's economic stimulus is helping to rebalance its economy towards relying more on domestic demand but it still needs to let its currency rise over time.

In October, the IMF raised its US growth outlook to 1.5 per cent in 2010 but Mr Strauss-Kahn said that forecast could be on the pessimistic side.

'Our forecast has that, not only in the United States but also for the rest of the world, 2010 will be a year of recovery,' Mr Strauss-Kahn told a news conference in Singapore where he was attending an Asia Pacific Economic Cooperation (Apec) meeting.

'I must say, in some respects, we had been a little pessimistic because growth has resumed a little earlier than expected, by one quarter or so.'

He said the dollar had remained resilient throughout the global crisis but most Asian currencies were undervalued and reiterated calls for the Chinese yuan to be revalued. 'China's economy in the coming years will be focused on domestic growth and the value of renminbi will have to be increased,' he said. -- THOMSON REUTERS