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在线翻译:
szdaily -> Markets
Researcher suggests free-floating yuan
    2017-September-5  08:53    Shenzhen Daily

CHINA should allow its currency to float freely as soon as possible with stable economic conditions allowing a window of opportunity to pursue exchange rate reforms, an influential government researcher was quoted by domestic media as saying yesterday.

The comments from Yu Yongding, a scholar at the China Academy of Social Sciences and former central bank adviser, come amid signs of stability in yuan trade and with cross-border capital flows improving over the past few months.

“Conditions for changing to a floating exchange rate regime are basically qualified,” China Securities Journal quoted Yu as saying.

“Signs of improvements in China’s economy are obvious, international capital payments are balanced, expectations for depreciation in the yuan have basically faded, and various measures of capital controls are already in place,” he said.

In the same article, Yu also said the introduction of a “counter-cyclical factor” into the official midpoint formula in May did not accurately reflect supply and demand in the foreign exchange market.

The People’s Bank of China added what it described as the “counter-cyclical factor” to its formula for the yuan’s midpoint calculations in late May, a move widely seen as an attempt to stem speculation.

The central bank said in its second quarter monetary policy report that the change would make the exchange rate regime more transparent, more market-oriented and rule-based. However, analysts say their ability to forecast the currency’s moves has diminished as a result of the changes.

“The pricing of the yuan exchange rate remains affected by the central bank’s intervention in the market,” he said. He added reforms should increase the weighting of the previous day’s official local close in the midpoint formula, rather than decrease the weighting, which is how the midpoint is currently determined.

The yuan strengthened to a fresh 14-month high against the U.S. dollar Friday after its best month on record — up 2.1 percent stronger than the dollar in August, its best month since 1994.

The dollar came under further pressure after U.S. annual inflation increased at its slowest pace since late 2015, casting doubts on whether the Federal Reserve would raise rates again this year. (SD-Agencies)

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