Yuan’s exchange rate increasingly decided by market

March 12, 2012 10:05 am


Zhou Xiaochuan, governor of the People's Bank of China/XINHUA
BEIJING, Mar 12 – A trade deficit in the first two months this year and its impact on the exchange rate of Renminbi is “a good thing” for China, the governor of China’s central bank said on Monday.

The supply and demand relations in the market are playing an increasing role in deciding the exchange rate of the Chinese currency, Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), said at a press conference on the sidelines of the ongoing annual parliamentary session.

China swung to a trade deficit of 31.48 billion U.S. dollars in February, the largest in a decade, as import growth far outpaced exports.

Yi Gang, vice governor of the PBOC and director of the State Administration of Foreign Exchange (SAFE), also described the trade deficit in February as a “positive sign” for a more balanced international balance of payment for China.


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