PBOC's HU calls exchange rate rigidity harmful

BEIJING, July 15 (Reuters) - International experience shows that exchange rate rigidity may increase a country's vulnerability to monetary and financial crises, Hu Xiaolian, a vice-governor of the People's Bank of China, said in remarks published on Thursday.

In a speech posted in English on the central bank's website, www.pbc.gov.cn, Hu said China would continue to improve its managed floating exchange rate regime, which she described as being in the country's long-term, fundamental interest.

Referring to the PBOC's June 19 abandonment of the yuan's 23-month-old peg to the dollar, Hu said:

"This is an important move in reforming the managed floating exchange rate regime and will help maintain RMB exchange rate basically stable at an adaptive and equilibrium level, promote a balanced BOP account and financial market stability and realise quality and rapid growth of the economy."

For Hu's speech, click on: here (Reporting by Alan Wheatley; Editing by Jacqueline Wong)