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Brazilian economists: China should maitain stable exchange rate

(Xinhua)
Updated: 2010-03-23 17:11

RIO DE JANEIRO: China should maintain a stable exchange rate of the yuan and not give in to foreign pressure on currency appreciation, Brazilian economists have said.

It is a matter of sovereignty for a country to adopt an exchange rate system that serves its interests, Darc Costa, former vice president of the Brazilian National Social and Economic Development Bank, told Xinhua on Monday.

Costa said China should be careful not to play into the hands of the United States, which, by demanding the appreciation of the yuan, is trying to have China pay for Washington's huge trade and budget deficits.

The United States has for several times pressed other countries to revalue their currencies to ease its financial pressure since the breakdown of the Bretton Woods System in 1973, he noted.

Washington's latest demand on the appreciation of the Chinese currency is another conspiracy, he warned.

The US demand of a stronger yuan will deprive China of its right to fix a price for its own currency and further hurt Chinese companies' competitiveness.

Celso Ming, a well-known economy and finance columnist in Brazil, said the yuan's exchange rate is not a determinant cause for global trade imbalances. Not a single trade treaty has seen a fixed exchange rate as a means to obtain unfair trade advantages.

Ming said it is wrong for US trade unions and politicians to press China to appreciate its currency as this kind of pressure is not the way of solving trade deficit problems.