An editorial published in the government-run China Securities Journal says the time is right for Beijing to widen the trading range of its currency, the yuan, against the U.S. dollar.The editorial, published Tuesday, says the wider yuan trading range would improve the currency’s flexibility, lower expectations of a protracted rise in the yuan’s value, and help combat inflation.Current monetary policy in China allows the yuan to rise or fall against the U.S. dollar by a half-percent beyond its daily mid-point price, which is set by the central bank. It is allowed to float up to 3 percent against the euro and the yen.
The United States and other nations complain that China’s currency is kept artificially weak to give Chinese exporters a trade advantage. Beijing argues that a rapid rise in the yuan would damage its export industries, but the United States says it would help China deal with rising inflation.China’s yuan is currently valued at about 6.4 to the U.S. dollar.The China Securities Journal says the lack of flexibility in the yuan trading range against the dollar has made Chinese exporters unwilling to accept more volatile non-dollar currencies in trade. – Voanews