The yuan should not rise more than 6 percent this year as Chinese exporters will feel the pain from a stronger currency, an economist at China's powerful economic planning agency was quoted as saying on Saturday.
Zhang Yansheng, who heads the economic research institute at the National Development and Reform Commission, told the China Securities Journal that Beijing should control the pace of gains in the yuan and not let it rise too fast.
The yuan has long been a source of discord between China and the United States, with some US politicians accusing China of deliberately suppressing it for trade advantage. China denies those allegations. Zhang said a stronger yuan would further squeeze Chinese exporters, who are already hurt by rising global commodity prices and higher labour costs at home.
"I think it is best if the yuan does not rise over 6 percent," Zhang was quoted as saying. "Its pace of appreciation should be controlled, and it should not rise too fast."
Zhang did not make clear if he was referring to the yuan's value against the US dollar or against a basket of currencies. The most the yuan has ever gained over one year is 6.6 percent, in 2008.
China's central bank, which oversees the government's daily management of the yuan against a basket of currencies, this week reiterated its long-standing pledge to keep it at a "basically stable level".
Many investors believe the central bank will let the yuan rise 5 percent against the US dollar in 2011, up from last year's 3.5 percent, in part to curb inflation.
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