China won't engage in any "currency wars" by depreciating the value of the yuanthrough monetary easing policies to shore up the economy, as some major economieshave done, said a former deputy central bank governor on Tuesday.
"The yuan will continue to fluctuate in both directions as the central bank strengthensmarket-oriented reforms," said Wu Xiaoling, who is still closely connected to thePeople's Bank of China and is now the vice-chairman of the National People'sCongress Financial and Economic Affairs Committee.
The easing policies conducted by some major economies, such as Japan, are similar to"quenching thirst with poison", she said at a press conference.
"Printing more money and devaluating the currency could be useful to promoteeconomic growth over a certain period. But if a country doesn't have a sound economicstructure or strong growth momentum, it would be poisonous to depend on a loosermonetary stance," Wu said.
Her remarks come after a report in Japan's leading economic daily Nikkei said that theBank of Japan's recently appointed leaders might launch fresh easing measures beforetheir first policy meeting next month.
The yen was under pressure in Asia on Tuesday as the US dollar strengthened, with96.7 Japanese yen against the greenback, the highest level since August 2009.
The yen has depreciated about 20 percent since the new Japanese government tookoffice at the end of last year. In January, the BOJ announced plans to undertake"unlimited" easing policies to fight against the country's lingering deflation.
"Instead of intervening in the currency market to contain appreciation and stimulateexports, China needs to create a fair and competitive financial environment fordomestic companies, and continue to promote the reform of the international monetarysystem," Wu said.
She said the yuan's exchange rate is already very close to its equilibrium level as thedifference between the onshore rate and its non-deliverable forwards on the offshoremarket is narrowing.
PBOC's deputy governor Yi Gang last week urged major economies to avoid thecompetitive devaluation of their currencies and said that G20 countries should complywith the group's joint statement and reach a consensus.
"The yuan will continue to fluctuate in both directions as the central bank strengthensmarket-oriented reforms," said Wu Xiaoling, who is still closely connected to thePeople's Bank of China and is now the vice-chairman of the National People'sCongress Financial and Economic Affairs Committee.
The easing policies conducted by some major economies, such as Japan, are similar to"quenching thirst with poison", she said at a press conference.
"Printing more money and devaluating the currency could be useful to promoteeconomic growth over a certain period. But if a country doesn't have a sound economicstructure or strong growth momentum, it would be poisonous to depend on a loosermonetary stance," Wu said.
Her remarks come after a report in Japan's leading economic daily Nikkei said that theBank of Japan's recently appointed leaders might launch fresh easing measures beforetheir first policy meeting next month.
The yen was under pressure in Asia on Tuesday as the US dollar strengthened, with96.7 Japanese yen against the greenback, the highest level since August 2009.
The yen has depreciated about 20 percent since the new Japanese government tookoffice at the end of last year. In January, the BOJ announced plans to undertake"unlimited" easing policies to fight against the country's lingering deflation.
"Instead of intervening in the currency market to contain appreciation and stimulateexports, China needs to create a fair and competitive financial environment fordomestic companies, and continue to promote the reform of the international monetarysystem," Wu said.
She said the yuan's exchange rate is already very close to its equilibrium level as thedifference between the onshore rate and its non-deliverable forwards on the offshoremarket is narrowing.
PBOC's deputy governor Yi Gang last week urged major economies to avoid thecompetitive devaluation of their currencies and said that G20 countries should complywith the group's joint statement and reach a consensus.
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