The head of China's central bank, Governor Zhou Xiaochuan, said he was "comfortable" with the current level of interest rates and said China was working on preparations for a loosening of its currency peg. Speaking in Hong Kong after a meeting of central bankers, Zhou gave no time frame for the changes to the currency peg, saying only that preparations were "subject to evaluation and the right time.'' Nonetheless he said the eventual goal was to let market demand set the level of the yuan, which has been pegged at about 8.3 to the dollar since 1995. Zhou's comments followed the publication of an interview he gave to the Xinhua news agency in which he said the Chinese currency was undervalued, and added that the central bank would "consider interest rate policy'' in coming months, without being more specific.
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