China should let yuan rise to fight inflation

Extrait de: China should let yuan rise to fight inflation, XE, 2011-03-22

BEIJING, March 22 (Reuters) - China should allow its currency to rise more quickly in the near term to repel imported inflationary pressure from soaring oil prices, an official newspaper said on Tuesday.

Over a longer horizon, dollar weakness will be a sustained force driving the yuan higher, the China Securities Journal added in an editorial.

 

Although the newspaper does not represent official policy, its call is consistent with views expressed before by the central bank and suggests that proponents of faster appreciation are becoming more vocal.

Both domestic and international factors are pushing prices up in China, the editorial said. The economy is flush with excess cash from capital inflows of recent years, stemming from hefty trade surpluses, and this is the main source of credit growth, it said.  

'From an international perspective, the main global commodity prices are continuing to rise and the imported inflationary pressure is extremely large,' the Chinese-language newspaper said.

China's concern over oil prices on Libyan fighting

China's concern over oil prices on Libyan fighting

While central bank reserve requirement and rate hikes had helped put the brakes on credit growth domestically, they have done little to ease the pressure from money inflows from abroad, and a stronger currency is a crucial part of the solution, the editorial said.

'Appreciation will reduce the yuan cost of imported goods, in particular blunting the impact of rising raw material costs and thereby directly relieving imported inflationary pressure,' it said.

A solidifying U.S. recovery would dent safe-haven demand for the dollar and add to upward pressure on the yuan, the newspaper added.

'The dollar has entered a long-term path of decline,' it said.

Et soyez assuré que les Américains vont continuer à exporter leurs inflations.

The yuan ended at a record high against the dollar on Monday and the People's Bank of China on Tuesday lifted its mid-point to another new peak, signalling its intentions to use the yuan as an inflation-fighting tool.

Nevertheless, yuan appreciation has moved at a plodding pace, with the currency gaining just 4 percent against the dollar since it was de pegged last June.

On est loin du 40 % que les Américains veulent avoir, mais c’est mieux que rien.

United States Dollar - Chinese Yuan

Tableau interactif de la BBC