Mon, Mar 18, 2002 - Page 17 News List

China's central bank chief wants to see strong yuan

BLOOMBERG , BEIJING

China's central bank Governor Dai Xianglong said he sees no reason why the Chinese yuan should be weakened, given the country's foreign reserves rose to a record last month.

"The yuan's stability is good for China, and good for the rest of Asia," Dai said in Beijing at a forum organized by the Bank of China, the country's oldest lender.

Dai has repeatedly stated the central bank's position of keeping the yuan stable. It's been trading at about 8.30 to the US dollar since 1993.

Some neighboring countries such as Japan are lobbying for Asia's second-biggest economy to break its peg to the US dollar, now that it has joined the WTO. At the same time, some economists worry that the Chinese government may deliberately weaken its currency to help exporters compete in overseas markets.

"There is no reason to weaken the yuan," Dai said. "The central bank will maintain a steady monetary policy over the next few years to keep the economy growing at at least 7 percent every year."

China's foreign reserves rose to a record US$223.5 billion at the end of February, from US$217.4 billion in January. China keeps the yuan's peg by buying up surplus dollars from China's state-run banks.

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