China to seek flexible exchange rate

The administrator in charge of China's foreign exchange reserves said that China was planning to make its exchange rate system more flexible, permitting greater freedom for the renminbi to fluctuate against a basket of foreign currencies. Guo Shuqing, head of the State Administration of Foreign Exchange and deputy governor of China's central bank, told the Financial Times that the country's leadership favored a floating system for exchange rates. Guo said that it was not certain if the renminbi, which has been pegged at 8.28 to the US dollar since the 1997 Asian financial crisis, was undervalued. He provided no specific timetable for a change in China's exchange rate.