China will keep yuan stable: central bank newspaper (Reuters)

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was a long time a coming. But it doesn’t stop here. The author shows two wonderful talents. Read the the whole sections to see what I mean. By: US Economy

BEIJING (Reuters) – The groundwork is in place for a stable yuan because China’s current account surplus is trending down and other currencies have been swirling about in choppy trade, an official newspaper said on Thursday.

The Financial News, which is published by the central bank, used a front-page editorial to drive home the point that large-scale currency appreciation does not figure in economic policy plans for next year.

“The environment exists for China to keep the yuan’s exchange rate basically stable,” it said.

China ended a nearly two-year peg to the dollar in mid-June and has since let the yuan rise about 2.5 percent.

China’s current account surplus has long served as a lightning rod for foreign critics, who say that an undervalued currency gives its exports an unfair advantage in global markets.

“The ratio of the current account surplus to the gross domestic product dropped noticeably in 2009 and it will drop further this year, indicating that China’s international payments are approaching a balanced condition,” it added.

China’s current account surplus was 9.4 percent of GDP in 2008, fell to 6.0 percent last year and is on track to dip to 5.5 percent this year, according to World Bank estimates.

The newspaper also said that choppy trade in global currency markets dictated greater stability of the yuan since the central bank refers to a basket of currencies in setting its exchange rate.

“The major international currencies have been fluctuating against each other and this objectively reduces the volatility of the yuan’s exchange rate,” it said.

(Reporting by Aileen Wang and Simon Rabinovitch; Editing by Ken Wills)

The breaking news, China will keep yuan stable: central bank newspaper
extract from US Economy

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