IMF chief keeps up pressure on China to let yuan rise
Posted: 18 November 2009 0328 hrs

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BEIJING: International Monetary Fund chief Dominique Strauss-Kahn on Tuesday again urged Beijing to let the yuan rise "sooner rather than later", saying it would benefit both China and the global economy.

"The renminbi (yuan) is undervalued. It's not only in the interests of the global economy but also in the interests of China to have a revaluation," Strauss-Kahn told a news conference at the end of a two-day visit to Beijing.

But Strauss-Kahn acknowledged that it would "take time" for China to loosen its grip on the yuan, whose exchange rate with the dollar has remained stable since July 2008.

"It's a process that will take time and it may be rather long," he told reporters after meeting with senior officials at the People's Bank of China and Ministry of Commerce.

"The concept of time may not have exactly the same meaning in the US as in China."

Beijing is under mounting pressure to let the yuan appreciate, with the United States and Europe complaining the currency is being kept artificially low.

A weakened yuan has the effect of boosting Chinese exports by making them more competitive overseas.

Strauss-Kahn - whose visit to China coincides with that of US President Barack Obama - delivered a similar message Friday in Singapore ahead of a weekend summit of Asia-Pacific leaders, and repeated it Monday in Beijing.

Most analysts say a stronger currency is necessary to boost Chinese domestic consumption and reduce the country's reliance on exports to drive the economy.

Last week, finance ministers from the Asia-Pacific Economic Cooperation forum called for greater exchange rate flexibility in the region - widely seen as code for China to allow the yuan to strengthen against the dollar.

But China has said it would keep the yuan stable until demand for Chinese exports has recovered.

- AFP/yb