IMF presses China on Yuan

Last week, this correspondent reported that American politicians, frustrated by their inability to convince China to further revalue the Yuan, were planning on using the IMF as a vehicle for applying pressure to China. Yesterday, the IMF fulfilled this request during a conference call with Chinese officials. IMF representatives referred to the Yuan’s marginal .33% rise since the July revaluation in their plea for China to
allow its currency to respond to market forces. Apparently, the IMF has been working closely with Chinese officials since 1999 on issues related to foreign exchange. The organization now feels China has the necessary infrastructure in place to support a more flexible Yuan. Reuters News reports:

“Greater exchange rate flexibility would contribute to rebalancing the composition of economic growth…and potentially raising consumption by boosting households’ real income,” said the director of the IMF’s Asia-Pacific department.

Read More: IMF presses China; says yuan movements too limited