IMF puts China's currency issue on centre stage
02 March 2010
Washington: Inspite of China's constant attempts to discourage any discussion regarding revaluation of its currency the renminbi, also known as the yuan, the International Monetary Fund has now brought the matter centre stage saying greater flexibility for the yuan was necessary to underpin a recovery in the global economy.
In blunt language, the IMF labelled the Chinese currency as being "substantially undervalued."
The IMF's statement was part of an assessment of G20 major economies.
"The Chinese renminbi has depreciated in real effective terms in tandem with the US dollar and is assessed to be substantially undervalued from a medium-term perspective," the IMF said in a report prepared for a G20 ministers meeting in Seoul, South Korea, at the weekend but only released on Monday.
The assessment was not inconsistent with earlier calls from the organisation charging the Chinese exchange rate as being too low and significantly undervalued against the US dollar.
The IMF is an organisation formed with a stated objective of stabilizing international exchange rates and facilitating development.