IMF lauds China's currency action
International Monetary Fund (IMF)'s chief has welcomed China's April 13 decision to widen the trading band of yuan against US dollar to 1 per cent from 0.5 per cent.
"I would like to welcome this important step by the People's Bank of China to increase the flexibility of their currency. This underlines China's commitment to rebalance its economy toward domestic consumption and allow market forces to play a greater role in determining the level of the exchange rate," said IMF Managing Director Christine Lagarde in a statement.
China's move is widely expected to allow the appreciation of the yuan against US dollar, given a wider room for other Asian currencies to appreciate without harming their export income.
Having been long pressured for it, China announced the action just when the economy eventually suffers from global imbalances. The Chinese authorities expect the economy to expand below 8 per cent this year, while World Bank recently forecast the 8.2 per cent growth.
