Anniversary marked by call for flexible RMB
18 July 2006
Beijing should introduce a more flexible foreign exchange regime and allow market forces to play a greater role in determining the yuan's value, according to a front-page commentary in the Financial News, a publication jointly run by the People's Bank of China and other national financial regulators. The article, which marks the first anniversary of the introduction of a managed float system on July 21 last year, said the yuan's daily floating band was still "relatively narrow" and its 1.4% appreciation against the US dollar "hasn't exceeded expectations". The article also called for the introduction of foreign-exchange products to the interbank market and for market participants to improve risk-hedging abilities to tackle increasing currency risks. The yuan ended Monday at 8.0048 to the US dollar, in one of its biggest drops of the month, compared with Friday's close of 7.9980.
