China Big Chinese state-owned banks kept the yuan in check, a day after its biggest rise since the currency was revalued in 2005, indicating Beijing will allow its currency to appreciate at a far slower pace than demanded by its critics in the West. The two-way movement in the yuan is not great by the standard of freely floated currencies but is unprecedented in China where until this week the central bank had squashed intraday volatility via intervention.
China However, it all but ruled out a one-off revaluation or major appreciation, saying there was “no basis for big fluctuations or changes” in the exchange rate. The dollar peg has come under intense fire from abroad as China’s export juggernaut roared back to life, while much of the rest of the global economy remained sluggish and beset by unemployment in the wake of the financial crisis. Just ahead of a G20 summit in Canada, the announcement seemed to be intended to placate critics of China’s currency regime.
