China's foreign exchange policy is in good shape and requires no
change, Governor Zhou
Xiaochuan said on Thursday.
Speaking in a session at the World Economic Forum's annual
meeting in Davos, Switzerland, Zhou said the country's move from a
fixed exchange rate against the US dollar to a managed float linked
to a basket of 20 currencies has introduced a great deal of
flexibility.
But Zhou said China still faced pressure from the international
community to let the yuan appreciate further despite the fact that
it has already risen by about 2.5 percent against the US dollar
since the change.
"The floating band now is OK ... but it is not fully utilized,"
Zhou said.
He declined to give details of the currency basket that China
uses, but said the US dollar accounts for "much less than 50
percent."
Zhou said he expects China's economy to continue to grow
strongly this year. He expects gross domestic product growth to be
between 8 percent and 9 percent. China's economy grew 9.9 percent
in 2005.
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(China Daily January 27, 2006)
