In an effort to remove speculation that the renminbi might be allowed to move more freely against other currencies, China’s central bank stated, on Sunday, that there were no plans to alter its exchange rate mechanism, reported the South China Morning Post.
The existing “managed floating exchange rate” system was “an institutional arrangement fit for China at present and in the foreseeable future”, Liu Guoqiang said in a brief statement published on the People’s Bank of China (PBOC)’s website. The system sees the renminbi set at a daily central parity rate against the US dollar and limited to a 2% value fluctuation either side of that mark.
The statement comes after the head of the Finance Research Institute at the PBOC said that the renminbi must be allowed to float freely if it were to be regarded as an international currency like the US Dollar.