From South China Morning Post, via Elite Chinese Politics and Political Economy blog:
Mainland monetary regulators have reportedly asked the State Council for a “one-off” appreciation of the yuan, a move that could signal a tough new policy to reduce rising global trade tensions and fight excessive liquidity.
The plan, reported in a state-owned newspaper yesterday, would mean an abrupt policy change by officials who have long argued for a gradual gain of the yuan against the US dollar and other currencies.
But with China facing growing demands from its key trading partners for a strong yuan, Beijing is under increasing pressure to widen the currency’s trading band and for one-off steps to accelerate revaluation.
Although the yuan has risen by more than 10 per cent since Beijing’s decision in July 2005 to scrap its peg to the US dollar, there has been no visible impact on the mainland’s surging trade surplus. [Full Text]