No plan to widen floating band of RMB exchange rate

December 19, 2006 3:41am CST
central bank official said Friday that the floating band of renminbi (RMB) exchange rate to foreign currencies is not to be widened, the Shanghai Securities News reported on Saturday. Related readings: China adds six yuan market makers to interbank market RMB breaks 7.83 mark against U.S. dollar RMB appreciates by 3.53 percent since reform PBOC advisor: Interest rate hikes possible Tang Xu, director of the research institute under the People's Bank of China, the central bank, said at a seminar that the floating range of RMB exchange rate should be defined in line with "real demand", instead of a forcing and rigid regulation. Tang was quoted as saying that there is no problem with the existing floating range of the exchange rate and there is no need to discuss it. Tang said changing the current unbalanced foreign trade conditions does not mean to seek a complete balance between export and import. Instead, efforts should be made to strike a balance between foreign trade and the actual conditions of economic growth. The RMB value has risen in value by nearly four percent since July 21, 2005, when the Chinese government launched the reform of exchange rate system to allow the yuan to float against the US dollar within a daily 0.3 percent band around the official central parity rate. The exchange rate was set at about 8.28 yuan per US dollar before the reform.
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