Publications
Partners
Washington - China allowed an annual IMF staff report that is critical of its currency policy to be released on Thursday for the first time in four years, a senior fund official said.
The report said the Chinese yuan was "substantially" undervalued despite Beijing's move to let the currency be traded more freely more than a month ago.
"I would hope to believe the fact that the Chinese decided to release the staff report reflects a view on their part that the report was balanced, was fairly reflective of their views as well as the staff's views and the overall picture that it was even-handed," said the IMF China mission chief Nigel Chalk.
"Obviously there was a difference of view on the currency and there was a difference of view on the prospects of the current account," said Chalk, who led an International Monetary Fund mission to China for annual consultations on Beijing's policies ahead of preparation of the report.
China has disallowed the IMF staff report from being made public since 2006, protesting against the fund's characterisation of its currency and pressuring the board to omit its findings, sources said.
Many analysts believe the yuan is vastly undervalued against the dollar - some think it is below its true value by as much as 40% - despite a June 19 announcement by the Chinese central bank to let the yuan trade more freely.
Since the decision, the yuan, which had been effectively pegged at 6.8 to the dollar since mid-2008, has appreciated by less than 1%.
The controversy over the IMF report on China also underscored differences in views on the yuan rate within the fund.
The split appeared between the IMF executive board and the staff, who went on the mission, as well as within the board.
The IMF board, in a summary report on the consultations with China, said on Tuesday that "several directors agreed that the exchange rate is undervalued," without citing the countries they represented.
"However, a number of others disagreed with the staff's assessment of the level of the exchange rate, noting that it is based on uncertain forecasts of the current account surplus," it said.
The directors from United States, Germany, France and Britain were believed to be among those who felt the yuan was undervalued, following persistent charges China kept the yuan low to gain a trade advantage.
- Reuters
