Yuan firms up slightly as Obama urges revaluation
12 March 2010
Beijing: The People's Bank of China set the yuan's central parity rate at 6.8262 to the US dollar on Friday, slightly higher than the previous day's central parity of 6.8263. Based on the new parity, the yuan is up 0.18% y-o-y against the dollar, according to market calculations.
The move, seemingly innocuous, comes in the backdrop of a fresh salvo fired by US president Barack Obama, asking China to heed international calls to revalue its currency. Obama said Thursday it would be better for international markets should China decide to move to a more market-based currency system.
"As I've said before, China moving to a more market-oriented exchange rate would make an essential contribution to that global rebalancing effort," Obama remarked in his address to the US Export-Import Bank's annual conference.
The remarks are a rare departure for Obama who, as a norm, does not comment on currency matters.
His remarks drew an immediate response from a senior Chinese central banker who said Friday that countries shouldn't rely on others to fix their own problems. People's Bank of China vice governor, Su Ning, also warned against the "politicization" of the yuan exchange rate issue.
Su said exchange rates don't necessarily resolve trade imbalances. "We believe the yuan exchange rate issue will not help shrink or increase our trade surpluses and deficits (in the US or China)." He was speaking on the sidelines of the meeting of the National People's Congress.