Any revaluation of the yuan's exchange rate will continue to be gradual as the mainland's current currency policy helped contain inflation, the central bank's deputy governor, Yi Gang, said yesterday.
Addressing a press conference after a meeting organised by the International Monetary Fund, Yi said Beijing was committed to increasing the yuan's flexibility, but he reiterated that the pace would be gradual despite rising pressure from the West. 'China will continue its efforts to make the renminbi more resilient,' he said. 'But the process must be a gradual one.'
The remarks ahead of the Group of 20 meeting this week in South Korea were seen as a message to Western nations that Beijing would stand firm on the currency issue.
Over the weekend, the US Treasury Department delayed the release of a report on whether Beijing manipulated the currency.
In June, Beijing lifted the yuan's 23-month de facto peg to the US dollar and let the currency appreciate against the greenback. But it is again under immense pressure to revalue the currency in part because of the country's soaring foreign currency reserves. By the end of September, the mainland's foreign reserves hit US$2.65 trillion, an increase of US$194 billion from the end of the second quarter.
Economists predict the Chinese currency will get stronger in the near future as its trade surplus swells. The country is determined to protect its export-oriented manufacturers, whose profit margins would be squeezed by a stronger currency.
Yi told the press conference that Beijing would stress its commitment to speed up efforts to expand domestic demand at the G20 meeting. He added that the government would transform the economy into a model that is driven by domestic consumption rather than inexpensive exports.
