China and other BRIC nations (Brazil, Russia, India) have been talking some time about the idea of switching from the U.S. dollar as a benchmark to some other currency arrangement.
One of those possibilities has been to move to a basket of currencies as a benchmark as the measure of an exchange rate for the renminbi, or yuan.
Deputy Gov. Hu Xiaolian of China's central bank said this on their government Web site earlier today.
Hu said, "Compared with pegging to a single currency, the exchange-rate regime with reference to a basket of currencies will help adjust exports and imports, current account, and balance of payment in a more effective manner.
"A floating exchange rate has impact on total imports and exports of an economy. Therefore, the floating cannot be aimed to adjust [only the] bilateral trade balance, and it is not advisable to just look at the [dollar-renminbi] exchange rate.
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