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China currency move a matter for medium-term – IMF

WASHINGTON (Reuters) – China recognises the need to let its currency appreciate for the good of its domestic economy but the move will only come in the “medium term”, the International Monetary Fund’s Asia director said on Saturday.

IMF Asia Director Anoop Singh told Reuters that China and other export-focussed Asian countries have been compelled by the stalling of growth in Western economies to seek a new model of sustained growth.

“That involves a range of policies to raise consumption (and) rebalancing and improving the exchange rate is part of this and I think we will see that over the medium term,” he said in an interview.

He would not be drawn further on how soon appreciation might be allowed.

Whether, when and by how much China might begin to let its tightly-controlled yuan appreciate is the focus of intense speculation on financial markets.

China’s exchange rate is also a growing political issue for the United States, where some politicians and manufacturers say keeping the yuan pegged at an artificially low rate hurts U.S. exports and steals jobs.

But there has been little sign of renewed pressure on Beijing from finance ministers and central bankers at four days of G20 and IMF talks in Washington — possibly a sign that officials expect China to let the yuan move soon.

via INTERVIEW – China currency move a matter for medium-term -IMF | Economy | Reuters.

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