The yuan rate will fluctuate up and down this year but increasingly trade at a level close to equilibrium with the US dollar, a senior lawmaker and former deputy governor of the central bank said Tuesday.
The appreciation and depreciation of the yuan both approached the baseline in 2012, which means the currency is nearing its equilibrium value, Wu Xiaoling, vice chairperson of the Financial and Economic Committee under the National People's Congress (NPC), said at a press conference Tuesday during the ongoing session of the NPC, China's legislature.
Her view echoed that of Yi Gang, deputy governor of the People's Bank of China, who said last week on the sidelines of the annual meeting of the NPC that China will further reform its exchange rate regime to make the yuan exchange rate more balanced, flexible and stable.
But Wu said a timetable for opening up the country's capital account is not yet available.
With controls on the capital account still in position in China, Chinese leaders and central bankers have repeatedly said that China will gradually open up its capital account to allow the yuan to be traded freely.
If the yuan is to be held and traded in international markets, China would have to create rules and institutions to govern these markets before investors would feel comfortable holding the yuan the same way they hold US dollars, euros or British pounds, DBS Bank in Singapore said in a research report Monday.
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