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FT.com / Europe - China resists European pressure on currency
China resists European pressure on currency

The European Union and China locked horns over exchange rates on Tuesday after authorities in Beijing deflected a European call for a rise in the level of the renminbi.

Only hours after eurozone finance ministers said the renminbi's exchange rate should more accurately reflect the country's vast and growing current account surplus, China's central bank set a noticeably low official reference rate for the currency against the dollar.

Market participants interpreted the action as a signal that China has no intention to yield to foreign pressure for a faster appreciation of the renminbi against the currencies of its western trade partners, although there was no firm evidence of this.

China pledged to manage the renminbi against a basket of global currencies when it broke its decade-old US dollar peg in mid-2005. But the currency since then has appeared to track the greenback rather than trade more broadly.

The 13-nation eurozone's ministers [...] announced that Mr Almunia, Mr Juncker and Jean-Claude Trichet, the European Central Bank president, would travel to China before the end of the year for high-level discussions on exchange rates and other issues.

For many eurozone ministers the problem was that the use of stronger language against the Americans might have risked playing into the hands of France and its unremitting public campaign against the ECB.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Wed Oct 10th, 2007 at 01:09:07 AM EST
[ Parent ]
carbon tax. On imports if necessary.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Oct 10th, 2007 at 04:45:33 AM EST
[ Parent ]

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