Economists are again predicting that the Chinese government will soon revalue the yuan, with some bold enough to offer a time frame
'We think Beijing will move before September,' said JP Morgan economist Ben Simpfendorfer.
'Technical conditions are right, with slower hot money flows and softening property prices allowing the government to move without being seen to reward speculators.'
JP Morgan expects a one-off revaluation of 5 per cent accompanied by a widening of the yuan's trading band. It projects the midpoint of the new band will be allowed to creep up gradually against the US dollar, allowing for a total 10 per cent rise in a year's time.
ING's chief economist for Asia, Tim Condon, believes Beijing will make a 10 per cent one-off revaluation by early next month, as it can do so without rewarding speculators. 'The economy seems to be slowing, inflation, foreign direct investment and property prices have cooled off, speculative capital flows and overheating pressures have diminished and so economic pressure to revalue has lowered commensurately,' he said.
Beijing has repeatedly said it will not be bullied into changing its currency regime, but maintains its final goal is a freely floating yuan.
'We cannot shed any light on this matter,' said Li Chao of the People's Bank of China.