By Karen Johnson
MONTREAL--Asian Development Bank President Haruhiko Kuroda said he's
heartened by the People's Bank of China's moves to widen the trading
band on the Chinese yuan, and says a more-expensive renminbi is good
for China.
"Greater currency appreciation would not stall economic growth in
China," Mr. Kuroda said on the sidelines of an economic conference in
Montreal. "It would rather facilitate a structural transformation of
the Chinese economy, from low-value-added to higher-value-added and
more technology-oriented."
The PBOC widened the yuan's trading band against the U.S. dollar in
April to 1.0% above and below a daily reference exchange rate from
0.5%. It last expanded the dollar/yuan trading band from 0.3% in May
2007.
"I always argue that it is in the interest of China to make the
renminbi appreciate much faster than it has been," Mr. Kuroda said,
because China has a large current account surplus and large foreign
exchange reserves - more than $3 trillion, or more than 60% of that
country's gross domestic product.
"It would be better for the Chinese economy not to accumulate so much.
They should use the opportunity to invest inside and outside of China
and to improve the living standard of the people," Mr. Kuroda said.
An appreciating currency means that China can import more goods for
less money, he added.
"Also I think greater flexibility of its exchange rate means greater
effectiveness of its monetary policy," he said.
Write to Karen Johnson at karen.johnson@dowjones.com
(END) Dow Jones Newswires
June 11, 2012 13:20 ET (17:20 GMT)
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