BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank’s currency policy as well as mounting expectations of a rise in the yuan’s exchange rate.
Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People’s Bank of China to describe its currency stance.
In its third quarter monetary policy report, the central bank failed to refer to keeping the yuan “basically stable at a reasonable and balanced level” when discussing the outlook for the exchange rate.
Asked whether the PBOC was heralding a return to the gradual appreciation of the yuan against the dollar seen from July 2005-July 2008, Chen told Reuters: “I don’t think the central bank meant to say that.”
Chen, however, said the yuan should reflect movements in major international currencies, which was also part of the PBOC’s policy formulation.
China is coming under growing international pressure to let the yuan rise. Its manufacturers have been gaining market share at the expense of rivals in countries whose currencies have risen against the falling dollar, to which the yuan is pegged.
But, speaking on the sidelines of a forum, Chen said his ministry was not worried about rising appreciation expectations.
Turning to China’s trade, Chen said there was only a small chance that exports would resume year-on-year growth by the end of 2009.
Many private economists, by contrast, expect positive growth in November or December because of the low base of comparison in 2008. Exports in October were 13.8 percent lower than a year earlier.
Chen also said a leap in China’s trade surplus to $24 billion in October from $12.9 billion in September did not constitute a new trend.
Reporting by Aileen Wang and Alan Wheatley; Editing by Alex Richardson