Business / Markets

Do not hype yuan fluctuation: MOC

(Xinhua) Updated: 2014-03-18 13:36

From the launch of the yuan's exchange rate reform in 2005 to the end of last year, the currency has appreciated by 35.75 percent against the US dollar, resulting in the currency's "effective" exchange rate rising 42.21 percent, according to Shen.

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"We hold that the recent moves of the renminbi are more a result of the market impact. Compared with the currencies of some emerging economies, the yuan's recent fluctuations remain in a normal range," he said.

Even though the yuan has depreciated against the US dollar in face value in recent months, that is not the whole picture, the spokesman stressed.

He pointed to the "real effective exchange rate" (REER), the weighted average of a country's currency relative to a basket of other major currencies adjusted for the effects of inflation, as a more accurate reflection of the real value of a currency in international trade.

The yuan's REER, which is calculated by the Bank of International Settlements, has actually kept rising early this year, jumping 2.03 percent in January, according to the spokesman.

Shen also stressed the importance of maintaining consistent and predictable policies in this area, saying the ministry will work to help achieve this goal.

The ministry will also work to expand the use of the renminbi in the international economy and trade to reduce exchange rate risks for enterprises, Shen said.