Any attempt to impose pressure on the Chinese currency, the yuan or RMB, to force a considerable revaluation cannot help at all, Vice-Premier Wu Yi said in Washington Thursday.

 

Since China introduced a RMB exchange rate reform in July, 2005, the new RMB exchange rate mechanism has been functioning smoothly, said Wu while giving a speech at the welcome banquet hosted by six American organizations.

 

She said that the RMB has now appreciated by 8.1 percent in cumulative terms.

 

"I believe the floating band of the RMB exchange rate will be constantly expanded with the market change," Wu said.

 

"China's exchange rate reform will be advanced in an orderly way under the principle of self-initiative, controllability and gradual progress," she added.

 

Wu said that the elasticity of the RMB exchange rate will be continuously increased through the reform, with a roughly stable RMB exchange rate maintained at a reasonable equilibrium.

 

"In the meantime, we must take measures to effectively control and duly dispose of risks within the financial system," she said.

 

Wu said that it is recognized by many internationally renowned economists that the RMB exchange rate is not the main cause of the huge US trade deficit.

 

"Any attempt to impose pressure on the RMB for its considerable revaluation cannot help at all and could probably injure the interests of the two countries and the public," she stressed.

 

The six organizations hosting the banquet are the US-China Business Council, the US Chamber of Commerce, the China General Chamber of Commerce-USA, the American Bankers Association, the American Council of Life Insurers and the Financial Services Forum.

 

(Xinhua News Agency May 25, 2007)