World Bank official says no case for yuan revaluation

09:26, March 31, 2010      

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A leading figure from the World Bank has rejected U.S. government claims that the Chinese yuan is undervalued.

Hans Timmer, who has a high-profile role as director of the bank's Development Prospects Group, said U.S. economic problems would not be solved by a change in the value of the yuan.

"I don't think you can make the case that the yuan is undervalued if you have an economy which has had no significant domestic inflation for five or 10 years, " he said.

Timmer's remarks will not be welcomed by the Obama administration, which has been pressing Beijing to revalue the yuan against the dollar so as to equalize the trade imbalances between the two countries.

The economist, who is responsible for international economic forecasts for the Washington-based organization, added that if there was a problem between the yuan and the dollar it was that the greenback had become an unstable currency.

"You have a situation where the dollar is a volatile currency and that the forces which drive the dollar are not necessarily the same forces which drive the renminbi. The current system does not make a lot of sense for the Chinese economy."

Timmer made his comments as a number of China's leading academics called upon the Chinese government to stand firm in the face of U.S. pressure to revalue the yuan.


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