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Yuan Pressure Need Not Grow in 06: PBOC
2005-12-13 12:01:51      Reuters
Chinese top banker Zhou Xiaochuan does not see more pressure on the yuan to rise in 2006.
SHANGHAI - Chinese central bank chief Zhou Xiaochuan does not see more pressure on the yuan to rise in 2006 if China trims its trade surplus, state media reported on Tuesday.

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"If we are able to cut the trade surplus, we won't see more pressure on the yuan to appreciate next year," Zhou told reporters at a financial forum in Beijing, the China Securities Journal said.

The authorities had studied the issue of the country's trade surplus and would take steps to reduce its size, the paper cited Zhou as saying.

Zhou on Monday poured cold water on speculation that China's swollen trade surplus could trigger a dramatic shift in currency policy, restating instead that the yuan was likely to keep rising only gradually.

The German magazine WirtschaftsWoche reported on Dec. 2 that China was preparing to revalue the yuan by 7.2 percent against the dollar on Jan. 1.

But asked about a possible revaluation or a widening in the yuan's trading band at the forum, central bank chief Zhou Xiaochuan told reporters: "There is no such thing. It's nonsense."

China revalued the yuan, also known as the renminbi, by 2.1 percent against the dollar on July 21 and swapped an 11-year-old dollar peg for a managed float that, in theory, lets the currency rise or fall by 0.3 percent a day against the dollar.

In practice, the yuan has since edged up just 0.4 percent against the dollar -- much to the irritation of some U.S. law-makers, who charge Beijing with deliberately holding down the currency to give its exporters a competitive edge.

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