China Asks For Patience for Exchange-Rate Reform
China claims to be hard at work on adjusting its exchange-rate system, and urges people to be patient.
Vice Finance Minister Li Yong feels that upward pressure is coming mainly from domestic sources rather that external ones.
“I don’t feel that it (upward pressure) is strong. I feel the pressure is not from the outside but from domestic needs,” said Yong.
The yuan has been held at around 8.3 per U.S. dollar for the past ten years.
Bloomberg News quotes the deputy assistant secretary at the U.S. Treasury:
China should loosen the yuan’s peg to the U.S. dollar immediately, Bobby J. Pittman, deputy assistant secretary at the U.S. Treasury, said in the text of a speech given yesterday to the ADB’s board of governors. Japan’s Finance Minister Sadakazu Tanigaki also yesterday called for China to adjust its exchange rate, though refrained from giving a timeframe.
Chinese policy makers “are now recognizing they don’t have much of a choice,” said Jim O’Neill, head of global economics research at Goldman Sachs Group Inc. in London. “The best way of reducing future speculation would be to make a bigger change than expected.”
Jin Renqing, China’s Finance Minister, said that Beijing was determined to make changes to its currency regime, but this is difficult to achieve now with all of the pressure and speculation.