Since last week's announcement that the value of China's currency, the Yuan
(also called the RMB), increased 2 percent there has been worldwide "speculation
that the revaluation of the RMB
was only the first step in a series of
adjustments that could 'lead to expectations for further RMB revaluation by the
People's Bank of China in the non-distant future," said a statement from
the bank's spokesperson.
The bank spokesperson, however, said such statements are inaccurate. He said
the increase "does not in the least imply an initial move that warrants further
actions in the future."
He also said one reason for the revaluation was to maintain the RMB exchange
rate [as] basically stable at an adaptive and equilibrium level.
"Such an adjustment was determined [by taking into consideration] the
size of surplus and the needs in the restructuring of China's foreign trade, while
at the same time taking into account the resilience of the domestic enterprises
to absorb the risks, basically satisfying the needs to achieve a broad trade balance
in goods and services."
The spokesperson added that the reform of the RMB exchange rate needed to be
a gradual procedure.
"Gradualism is the principle applied in the reform of the RMB exchange
rate regime, rather than in the adjustment of the RMB exchange rate. The reform
is focused not on the quantitative adjustment of the RMB exchange rate, but on
the improvement of [its] regime."
There had been speculation that the revaluation might be the beginning of a
move toward valuing the RMB in relation to the dollar or Euro. Experts on Chinese
trade say such a move would allow U.S. companies to compete with China in a more
equitable environment. With the announcement, China sought to downplay such a