China Says Yuan Exchange-Rate Moves to be Gradual

Increase in the currency falls well short of U.S. demands.

China on July 8 again ruled out large shifts in the yuan exchange rate after Beijing's recent pledge to let the currency trade more freely against the dollar fueled expectations of an appreciation.

The yuan has gained 0.7% against the greenback since the central bank vowed nearly three weeks ago to loosen its currency controls amid mounting international pressure for a stronger yuan.

"(We will) keep the yuan's rate basically stable at a reasonable and balanced level to improve the international balance of payments and maintain the stability of the macroeconomy and the financial market," the nation's foreign exchange regulator said on its website.

The State Administration of Foreign Exchange, a powerful organ of the central bank, said it would carry out "dynamic management and adjustment of the yuan floating exchange rate according to the trading band."

The yuan is currently allowed to trade against the dollar within a range of 0.5% either side of a center point set daily by the central bank.

The increase in the currency so far falls well short of demands by critics, including U.S. lawmakers, who claim the yuan is undervalued against the dollar by as much as 40%.

Copyright Agence France-Presse, 2010

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