Importers and exporters should keep a close eye on the value of the Chinese currency, the RMB, in the coming weeks. Having being effectively pegged at around RMB6.8285 to the US dollar for the duration of the global recession – in order to assist its export economy – China appears to be preparing the ground for a reassessment of the RMB’s exchange value.
State media this week reported comments from Zhang Zhijun, China’s Vice-Foreign Minister, that “the RMB rate’s flexibility may widen.” This follows a similar hint from the People’s Bank of China earlier in the month, and the publication of figures that showed October’s fall in China’s export growth occurred at its slowest year-on-year pace this year, dropping 13.8 per cent – following a 15.2 per cent decline in September.
Although it has faced down strong global pressure to revalue its currency, which many analysts believe is considerably undervalued, China seems likely to make some minor exchange rate tinkering. Adding intrigue to the equation is the fact that the 12th China-European Union Summit in Nanjing at the end of November will feature discussions between top officials from both the European and Chinese Central Banks.