China to Boost Ties With IMF |
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July 2, 2009
China will next week take an important step towards reconciliation with the International Monetary Fund, agreeing to disagree about its controversial currency policy in order to return to good standing in an organization it hopes to influence.
China will next week take an important step towards reconciliation with the International Monetary Fund, agreeing to disagree about its controversial currency policy in order to return to good standing in an organization it hopes to influence.
For the past three years, China has blocked IMF reviews of its economy – which are supposed to be annual for every member country – because it objected to public criticism of its tightly-controlled exchange rate. But a team of IMF officials visited China about a month ago, and have completed a draft review that is now being circulated for comments.
The IMF's draft report says China's exchange rate "continues to be substantially undervalued," according to a person who has seen the document, called an Article IV consultation. That's in line with what senior IMF officials have repeatedly said in public. China has kept its currency, the yuan or renminbi, basically fixed against the U.S. dollar since July last year, though it has risen, along with the dollar, against other currencies since then.
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