Yuan to acquire greater flexibility

China intends to keep the exchange rate of its currency stable over the next few years but will make it more flexible, deputy central bank governor Wu Xiaoling told an economic forum in Beijing in April. In addition, he said, the authorities would gradually move towards convertibility on the capital account.

China’s currency, the yuan, is currently maintained within a narrow range of Yn8.276-8.280 to the US dollar by intervention from the People’s Bank of China. Officials had previously said that they were considering a wider band for the currency as China opens up its markets following entry to the World Trade Organisation. At present the yuan is only convertible on the current account; convertibility on the capital account is considered a long-term goal.