The yuan ended flat against the dollar on Friday after an adviser to the central bank said late on Thursday that China's economic recovery will last into 2010, underscoring views that the stable yuan policy will continue.
Fan Gang, the academic member of the People's Bank of China's monetary policy committee, told a forum that China's economic recovery will be sustained into next year as fiscal stimulus continues to give a boost and private investment and exports both pick up.
"Talking about the economy next year, I am optimistic personally. I think the recovery will continue," Fan said. "I believe China will see positive growth in exports next year," he said. "We're still confident that China can achieve around eight percent growth next year."
"If the economic recovery can be on a solid footing in 2010, the yuan may appreciate at that time," said a dealer at an Asian bank in Shanghai. "We expect the economy may come into full recovery around the second quarter of 2010," she said. The Chinese central bank fixed the yuan's daily mid-point at 6.8310 versus the dollar on Friday, down marginally from Thursday's reference rate of 6.8307.
Spot yuan hit its intraday high of 6.8297 against the dollar on Friday, it highest level since June 4. It closed at 6.8300, barely changed from Thursday's close of 6.8305. It is the first time in three months that spot yuan has risen above 6.8300, but dealers said the increase did not represent a trend, and the central bank would still keep the yuan leashed in a virtual peg around 6.8300.
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