Time Not Ripe for China to End Dollar Peg: Adviser

Reuters reports on the latest in the Chinese currency revaluation saga:

The conditions are not ripe for China to unshackle the yuan from its 21-month-old peg to the dollar, a senior government economist said in comments published on Monday.Zhao Jinping, the deputy head of foreign trade research with the Development Research Center (DRC), a think-tank under China’s cabinet, said Beijing was not comfortable enough right now to let the yuan rise because its export sector had not fully recovered.

“As for short-term policies like tax, interest rates and exchange rates, the conditions for them to change in the near term do not exist,” Zhao wrote in an opinion piece that was published on the China Economic Times, a newspaper run by the DRC.

But Zhao added: “If China’s exports and imports maintain rapid growth through the second and the third quarter, China can exit (from the anti-crisis policies) in an appropriate manner.”

Strong signals of a thaw in relations between Washington and Beijing have fanned expectations that China may resume appreciation of its currency soon, or even conduct another one-off revaluation.

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