Share

IMF urges China to let yuan rise

Beijing - The chief of the International Monetary Fund said Tuesday that Beijing should let its currency rise as a stronger yuan would help China's development and ease global imbalances.

IMF managing director Dominique Strauss-Kahn's comments came as US President Barack Obama was visiting Beijing amid strains over trade and China's currency. Washington says the weak renminbi, as the currency is also known, gives Chinese exporters an unfair price advantage, adding to the US trade deficit.

"We do believe firmly in the IMF that the renminbi is undervalued, and that it is not only in the interests of the global economy but also in the interests of China to have revaluation of the currency," Strauss-Kahn told reporters.

A stronger yuan would help Beijing's effort to boost consumer spending and reduce reliance on investment and exports to drive growth, he said.

Strauss-Kahn met with Chinese officials during a two-day visit and said such a rebalancing is the government's goal. But he said he had "very little insight" into when Beijing might allow the yuan to rise against the dollar.

Beijing broke the yuan's direct link with the dollar in mid-2005 and allowed it to rise by more than 20% against the US currency over the next three years. But that increase stopped in late 2008 as Beijing tried to help its exporters stay competitive amid plunging demand. The yuan has held steady against the dollar since then.

Strauss-Kahn said China has gained from stronger exports due to a weak currency that held down prices of its goods abroad. But he said the rest of the economy suffered distortions.

"If you have wrong prices you make wrong decisions, especially concerning investments," he said. "It's now time for China, having accumulated a lot of advantages from an undervalued currency, to look more forward to investment and long-term stability, and this long-term stability goes with getting rid of this distortion."

- AP

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.88
+0.3%
Rand - Pound
23.86
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders