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Many IMF directors want gradual yuan moves
(AP)
Updated: 2005-09-13 09:28
WASHINGTON - The International Monetary Fund wants to see China build upon
efforts to revamp its currency system, although IMF officials differ on how
quickly this should be done.
A Chinese woman
walks past a poster advertising foreign exchange business at a bank
in Shanghai in this August 11, 2005 photo. Many IMF directors said they
want a gradual, cautious reform of the Chinese yuan exchange system.
[Reuters] | That was among the points in an economic snapshot of China released Monday.
The assessment is part of ongoing economic evaluations of countries conducted by
the 184-nation IMF, which seeks to keep a pulse on the world economy.
Responding to calls from the United States, the rest of the world's economic
powers, the IMF and others, China announced in late July that it was allowing
its currency to rise slightly against the U.S. dollar.
For a decade, Beijing had linked its currency, the yuan, directly to the U.S.
dollar.
The policy has long been a sore spot for U.S. manufacturers who contend that
China's currency practice has artificially undervalued the yuan, hurting sales
of U.S. exports and costing U.S. factory jobs.
While U.S. manufacturers and the Bush administration welcomed China's move in
July, they still said they would like to see more progress by China toward a
more flexible currency system.
IMF officials in Monday's assessment said they would like to see progress as
well, but they had different thoughts on the pace.
"Going forward, many (IMF) directors supported a gradual, cautious approach
to further increasing exchange-rate flexibility ... to allow time for the
economy to adjust," the assessment said. "However, a number of other directors
recommended that the authorities allow the exchange rate to move more quickly
toward a level that better reflects underlying market forces."
IMF officials also said that "protectionist sentiments" have increased in
recent months from some of China's trading partners as Chinese-made clothing and
textiles shipments abroad has surged. In response, the United States has imposed
limits on certain Chinese apparel and textiles.
On other matters, IMF officials projected China's economic would grow by a
blistering 9 percent this year, down slightly from 9.5 percent growth logged in
both 2003 and 2004. Inflation should average around 3 percent this year, down
from 3.9 percent in 2004.
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