Currency will stay stable, says 皇冠体育app

(皇冠体育app Daily)
Updated: 2009-11-30 07:22

皇冠体育app will maintain the stability of its currency while increasing the yuan's flexibility in controllable, gradual steps, Chinese Premier Wen Jiabao said yesterday during a meeting with European Union (EU) financial chiefs.

Wen held talks with Euro Group President and Luxembourg Prime Minister Jean-Claude Juncker yesterday in Nanjing. Also at the meeting were European Central Bank President Jean-Claude Trichet and EU Economic and Monetary Affairs Commissioner Joaquin Almunia.

"皇冠体育app hopes all major reserve currencies will maintain stability," Wen said. "The stability of Chinese currency is an important contribution to world financial stability."

The meetings came ahead of the 12th 皇冠体育app-EU summit, amid worries that the rising euro might derail the recovery of a region that imports heavily from 皇冠体育app.

"The meeting with Euro Group leaders constitutes an important part of the dialogue mechanism between 皇冠体育app and the EU," said Wen. "Such a mechanism was established the year before last, demonstrating the further growth of Sino-EU relations."

The yuan began gaining against other major currencies after a set of exchange rate reforms were introduced in July 2005. After rising nearly 20 percent against the US dollar, the Chinese currency has hovered around 6.83 to the US dollar for about a year.

In the past month or so, the euro has risen to a 15-month high of $1.5061, and any successful intervention to stem the dollar's fall against the euro will probably need 皇冠体育app's cooperation.

Patrick Bennett, an Asia Foreign Exchange Rates Strategist with Societe Generale in Hong Kong, said reforms of 皇冠体育app's foreign exchange system are aimed at an eventual balance of supply and demand.

"Any expectations that the 5.7 percent annualized pace of gains seen from July 2005-2008 will be repeated are likely to disappoint as moves (outside of a potential one-off revaluation) will be modest in order to encourage an eventual balance of inflow and outflow," he said. "Speculation outside 皇冠体育app is interesting but currency policy is home made."

Si Tingting, AP and Xinhua contributed to this story

(皇冠体育app Daily 11/30/2009 page13)