China must keep monetary policy independence - commerce ministry - UPDATE |
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Published
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Tue, 16 Jan 2007 04:56
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SHANGHAI (XFN-ASIA) - China must keep its monetary policy independent from its exchange rate policy, given the current sharp appreciation pressure on the yuan, the commerce ministry said in the second section of a two-part report.'Considering the substantial appreciation pressure ...we need to send a clear message to the outside world that we are firmly safeguarding the independence of our monetary policy and must not make it appendant to exchange rate policy', the ministry said in the report published on its website.It reiterated the view that China should take a gradual and independent approach to appreciation of the yuan.'A gradual appreciation involves little risks and the greatest efficiency,' it said.The ministry added that the current strengthening of the yuan is helpful in reducing the country's heavy reliance on export-led growth, but it said more needs to be done to boost domestic demand as '(the still relatively) undervalued yuan is only one of the reasons for the imbalance in the economy.The ministry said yesterday, in the first part of the report, that it expects the yuan to rise a further 4-5 pct this year, ending 2007 at about 9-10 pct higher to the US dollar than before it was revalued in July 2005.qionghui.feng@xinhuafinance.com
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China must keep monetary policy independence - commerce ministry 