Chinese premier rules out immediate reform of yuan

06/27/05 - newratings.com

LONDON, June 27 (newratings.com) – Chinese Premier, Wen Jiabao, announced on Sunday that although China favours a flexible currency, it will not be rushed into doing so. He said the Chinese currency’s peg to the US dollar will be removed only after the steps necessary to avoid economic shocks have been taken.

Speaking at the opening ceremony of the Asia-Europe Meeting (ASEM) of finance ministers in the northern Chinese port city of Tianjin, Jiabao said China was in favour of moving to a market-based and floating exchange rate system, but the timing was not certain. China will take steps to reform its currency while trying to prevent market fluctuations and economic instability, Jiabao elaborated. Beijing's policy to keep the yuan basically stable had helped not just China but also the economies and trade in the region and globally, the Chinese Premier said. China has been facing increasing international pressure especially from the US to loosen the yuan’s peg to the US dollar.