China stays firm on its managed exchange rate policy
The world could not expect drastic adjustments on yuan's rate as China is set to maintain its policy of managed currency exchange rate regime, arguing that that such measure was only in consideration of the country's long term economic interest.
In a speech published by the country's central bank website, vice governor Hu Xiaolian has asserted Beijing's position and said that "the regime is essential for economic restructuring and the optimisation of resource allocation."
China has pledged to ease its control on the yuan exchange rate and allow it to freely trade against the US dollar and last month, the People's Bank of China initiated the early part of its currency policy change but it maintained some semblance of tight hold on the local currency.
The Chinese government has effectively locked the yuan at 6.8 against the US dollar since the mid-part of 2008.
Such tight policy has elicited criticism from its trade partners, especially from the United States, which accuses China of unfair manipulation of its currency to gain advantage for the country's cheap export products.
The latest development, however, where Mr Hu's speech was posted simultaneously in English and Chinese versions, led to speculations that Beijing could be exerting efforts to reach out to its critics on the government's controversial exchange rate policy.
Mr Hu's undated speech had indicated that China's policymakers would sustain their efforts to improve the exchange rate system as it stressed that further reforms have paved the way for potentially future benefits.
The speech underscored Beijing's adamant policy of protecting its export industry as it asserted that the government would be willing to take the necessary steps to "minimise possible negative impacts from further changes to the currency," obviously alluding to the possibility the sector would be exposed by a stronger currency exchange rate.