Premier Wen Jiabao ruled out a further one-off revaluation of the local currency yesterday, but said efforts will be made to have more flexibility in the exchange-rate regime.

"There won't be any more one-off administrative move on renminbi appreciation or depreciation; or any surprise move," Wen told a press conference yesterday.

"We have established a new renminbi exchange-rate regime and we will further build this system and strengthen it," he said.

"We will expand the foreign exchange market and allow more flexibility and fluctuation of the Chinese currency."

China surprised the market last July when it reformed a decade-old exchange-rate regime, allowing the renminbi to appreciate by 2 per cent against the US dollar and linking it to a basket of currencies instead of the greenback alone.

But it still faces international pressure to let the renminbi appreciate further, although Chinese officials have been reiterating that the exchange-rate regime will be more flexible.

The authorities have been accelerating the building of a more mature foreign exchange market by introducing derivatives such as forwards and swaps.

On the back of a hefty surplus, China's forex reserves rose 34.3 per cent on a year-on-year basis to US$818.9 billion at the end of last year, which was 17 percentage points slower than a year earlier.

Economists have said that China's export competitiveness is derived from factors such as low labour costs, rather than the exchange rate.

(China Daily 03/15/2006 page1)