China rebuffs call for RMB revaluation
2 November 2006
China must reform its currency cautiously to prevent a serious impact on jobs and the banking system, policymakers told the International Monetary Fund. In a 74-page reported released Wednesday, the IMF called for a "significant" rise in the yuan's exchange rate to help rebalance the economy and fix a conflict in monetary policy that arises from the lack of flexibility in the currency, the South China Morning Post reported. Beijing's response, which the IMF sounded out in May, was agreement that greater flexibility is needed over the medium term but that change would have to be gradual and controlled "especially since the effects of such a change would be largely felt by exporters of low value-added goods".