China could cope with a yearly 5% appreciation of its currency but anything in excess of this could have disastrous effects on the economy, a central bank advisor told state media Saturday. Fan Gang, the academic member of the People's Bank of China monetary policy committee, warned that increasing the rate beyond 5% would have a serious impact on economic growth and employment, Dow Jones Newswires reported. Fan also said that faster appreciation would cause more speculative money to flow into the economy and spoke out against opening up China's capital account. The yuan rose 2.1% in July of last year in a one-off revaluation but it has only risen 3.1% since then.
Categories