China has defended the recent weakening of the renminbi, saying it has been due to a combination of factors, including pessimism toward its economy and the tapering of economic stimulus in the United States, the official People’s Daily reported in its overseas edition Wednesday.
Although the renminbi was down 2.64 percent in the first quarter, it has been strengthening for eight years, Tan Yaling, head of China Forex Investment Research Institute, was quoted as saying.
Fluctuations in the Chinese unit is a normal phenomenon, especially as interest rates move closer to market principles, the report said, citing unnamed analysts.
If the renminbi rises too rapidly, it will hurt the competitiveness of Chinese exports and inflate commodity and asset prices, it said.
The US has accused China of manipulating the currency to deflate its value in recent weeks. It has been pressing the government to allow the currency to appreciate.
Between July 2005 and the end of 2013, the renminbi has gone up by a cumulative 35.7 percent against the US dollar, even during 2008 when the US had to keep the greenback strong to mitigate the risk of an economic crisis, the report said.
– Contact HKEJ at [email protected]