China restates gradual freeing up of yuan
(Reuters)
Updated: 2006-04-12 15:57
China will take gradual steps to make the yuan fully convertible while
guarding against the inflow of speculative capital, the foreign exchange
regulator said on Wednesday.
China would make the yuan convertible eventually, but it would tread
cautiously in the process, the State Administration of Foreign Exchange (SAFE)
said in a statement posted on its Web site, (www.safe.gov.cn), reaffirming its
policy.
"We must be clear-headed in the process of steadily pushing forward the
yuan's capital-account convertibility, refrain from being rigid and
conservative, but prevent any blind and rash moves," Li Dongrong, vice head of
SAFE, was quoted as saying.
The regulator would step up monitoring of short-term capital flows and take
steps to prevent inflows of speculative capital to help maintain financial
security, the administration said.
Chinese officials have repeatedly pledged to make the yuan fully convertible,
but they have never given a firm timetable.
While the yuan is convertible on the current account, which covers trade,
analysts see full convertibility years away. Economists say the yuan's limited
convertibility helped shield China from the impact of the Asian financial
crisis.
China, keen to relieve upward pressure on the yuan, has relaxed some capital
controls in recent years, allowing domestic firms to invest more overseas and
letting multinationals lend foreign currency to their overseas
subsidiaries.
(For more biz stories, please visit Industry Updates) |
