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Bank denies yuan revaluation next week
(CRI/AP)
Updated: 2005-04-30 14:54
China does not plan to revalue its currency, the yuan, during next week's
Labor Day holiday, a central bank spokesman said Friday, quashing rumors that
such a change was imminent.
"As far as we know, there's no adjustment expected in the yuan exchange
rate," said Bai Li, spokesman for the People's Bank of China.
A brief wave of speculation over a possible shift in currency policy roiled
regional share and currency markets Friday. Such rumors have been circulating in
the past week, despite official denials that major changes were pending.
A key measure of expectations for the yuan's future value, discounts on
dollar/yuan non-deliverable forwards (NDF), widened sharply to 4800/4200 from
4300/4150 Friday morning amid revived speculation over a possible revaluation.
The NDF discount rate does not affect the yuan's actual value.
Bai declined to comment on the movement, saying: "It's up to the market to
explain any market activities."
Authorities sometimes choose to announce policy changes during public
holidays, and China's financial markets will be closed next week for the
national holiday.
China limits trading in the yuan and has kept its value in a narrow range
near 8.28 yuan per dollar since 1994. The United States and other nations say
the yuan is undervalued, giving China's exporters an unfair price advantage.
Beijing says it will eventually let the yuan trade freely on world markets,
but that doing so immediately would damage the country's frail banks and
financial industries.
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