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RMB appreciation expected to slow

(People's Daily Overseas Edition)

10:03, October 30, 2011

Edited and translated by People's Daily Online

Data from the China Foreign Exchange Trade System shows that the central parity rate of the RMB against the U.S. dollar stood at 6.3425 on Oct. 25. U.S. dollar fells 124.00 basis points and RMB-to-dollar exchange rate fell below 6.35 for the first time.

Pressure from US causes RMB appreciation expectations

Why has the RMB exchange rate continued to rise? Experts said that there are domestic and international factors.

"The recent continuous RMB appreciation is a policy choice of China's central bank after taking into account the domestic and international situation," Gao Jie, assistant professor of the School of Banking and Finance under the University of International Business and Economics, said.

Foreign exchange policy is a policy tool of the central bank to regulate the macro economy and RMB appreciation can help phase out backward production facilities to adjust China's industry structure. Moreover, RMB appreciation can help ease domestic inflation.

Yan Xiaona, vice director of the Research Center for International Finance and Economics under the Chinese Academy of Social Sciences, said that China’s economy has maintained faster and sounder growth than that of other emerging countries and the United States or Europe facing financial or debt crises, which is a fundamental economic factor behind RMB appreciation.

The international factors can mostly be boiled down to pressure from the United States. Yan said that the recent RMB appreciation pressure from the United States has resulted in appreciation expectations that are the primary cause behind the recent new highs of the RMB exchange rate.

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Ojbserver at 2011-10-31222.127.65.*
You just made the Chinese currency bill move from the Senate to the House. Parity is not just a word, it means "the quality or state of being equal or equivalent".

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