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Last updated at: (Beijing Time) Tuesday, January 15, 2002

Central Bank Top Governor Urges Japan to Stabilize Yen

Unstopped depreciation of Japanese yen will surely hurt the stability of Chinese RMB's exchange rate with the world hard currencies, said Dai Xianglong, governor of China's central bank on Tuesday.
China hopes Japan Government take measures to halt the yen from a free falling, Dai added.


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Great Pressure on Chinese RMB

Speaking at a press conference arranged by the State Council Information Office, the senior banker said the yen has been devalued by at least 15 per cent since late last year, which "didn't help Japanese economy much, affected other Asian economies, and put great pressure on the Chinese RMB".

Dai said that the falling trend of the yen, if not stopped immediately, will lead to devaluations of other Asian currencies on a wide range, and might force the People's Bank of China, the central bank, to devalue RMB in order to lessen export pressure. Dai said China has made its stance clear to the Japanese Government.

According to Dai, Japan is the world's second largest economy and has the ability to support a stable exchange rate. He said the United States kept its dollar strong even though its economy is ``neither good".

China to Make Further Efforts

Meanwhile, Dai assured that China will improve foreign exchange administration and maintain a strong position in balance of payments and exchange rate stability.

  • Exchange Rate


    • The exchange rate formation mechanism will be improved while a stable exchange rate maintained, Dai said, noting that better management of current account will be accompanied by progress in capital account convertibility.

  • Exchange and Cooperation


    • "We will promote international cooperation by working toward the completion of the currency swap arrangement with Japan, the Republic of Korea and ASEAN (the Association of South-East Asian Nations) countries aimed at financial stability in the region," he said.

    Dai Xianglong, governor of the People's Bank of China, said in Beijing on Tuesday.

    Foreign Exchange Reserves Increased

    Dai also announced that China's foreign exchange reserves reached US$212.2 billion at the end of 2001, representing an increase of US$46.6 billion, or up 28.14 percent, over that at the beginning of 2001.



    FM Spokesman on Devaluation of Japanese Yen

    China hopes the Japanese government will assume a responsible attitude and prevent the depreciation of currencies in the rest of Asia because of the devaluation of the Japanese yen, said a Chinese Foreign Ministry spokesman on January 12.

    Sun said that Japan is Asia's biggest economy with a strong economic strength. The continued devaluation of the Japanese yen will have an adverse impact on the economic development and financial stability in Asia, he said.



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