China Calls Rapid Yuan Rise Impossible

The Ministry of Foreign Affairs on Wednesday commented that yuan appreciation in the near term is out of the question. While the yuan has risen around 30% against the U.S. dollar, Foreign Ministry spokeswoman asserts that the yuan is close to reasonable equilibrium level. From the Journal:

“In the short term, pushing for rapid yuan appreciation is not possible. If Chinese slows, will reduce global aggregate demand,” Ms. Jiang said.

In public comments about the issue, Chinese have stressed that yuan will be gradual, but haven’t explicitly said that rapid appreciation is off the table.

Standard Chartered economist Stephen Green projected Tuesday that the yuan’s appreciation against the dollar will slow to 3% to 4% in from 5.5% in , due to China’s slowing economic growth.

On Wednesday, Bank of America-Merrill Lynch economist Lu Ting said that due to recent dollar strength, the yuan has actually appreciated by 4.1% against a broader basket of currencies since the end of July.

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