China to step-up FX reform, allow freer yuan trade

March 14, 2012 05:56

BEIJING - China will intensify reforms of its currency regime and allow the yuan to float more freely, Premier Wen Jiabao said on Wednesday at the end of an annual parliament session punctuated by signs of a slowing economy.

"In the Hong Kong market, NDFs (non-deliverable forwards) have started to fluctuate both ways. This tells us the yuan is possibly near a balanced level," Wen told a news conference on the last day of the 2012 National People's Congress meeting."We will step-up exchange rate reforms, especially in increasing two-way fluctuations," Wen said.

At the opening of the meeting last week, Wen cut China's economic growth target for this year to an eight-year low of 7.5 percent, and data released on Saturday showed that China's trade balance plunged $31.5 billion into the red in February, the largest deficit in at least a decade.

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