Economy

OECD welcomes China's announcement on yuan flexibility

(Xinhua)
Updated: 2010-06-23 11:20

PARIS - The Paris-based Organization of Economic Cooperation and Development (OECD) on Tuesday welcomed China's announcement of increasing the exchange rate flexibility of its currency yuan.

The move was helpful not only to China's sustainable growth but also the world economy, OECD Secretary-General Angel Gurria said.

"A combination of sustained fiscal expansion, continued structural reform and exchange rate flexibility, should provide a strong contribution from China to the achievement of a strong, sustained, and balanced growth of the world economy," Gurria said in a statement.

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Richard Herd, an economist heading the OECD's China and Asia Unit, said it was impossible to achieve yuan appreciation over one night.

"The policy is not a political gesture; the policy is a sound economics-based effort," Herd said in an interview with Xinhua, rebutting reports interpreting the statement as just lip service.

China's central bank announced over the weekend it would push forward reform of the yuan exchange rate and ruled out a one-off revaluation.