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| China's yuan no longer undervalued, says IMF | China's yuan no longer undervalued, says IMF |
| (35 minutes later) | |
| China's currency "is no longer undervalued", according to the International Monetary Fund (IMF). | China's currency "is no longer undervalued", according to the International Monetary Fund (IMF). |
| The US has long suggested that China has manipulated the value of the yuan to boost its exports. | The US has long suggested that China has manipulated the value of the yuan to boost its exports. |
| Undervaluation has been a problem in the past, says the IMF in a statement, but this is no longer the case. | Undervaluation has been a problem in the past, says the IMF in a statement, but this is no longer the case. |
| Substantial "appreciation over the past year has brought the exchange rate to a level that is no longer undervalued", it says. | Substantial "appreciation over the past year has brought the exchange rate to a level that is no longer undervalued", it says. |
| The IMF says China should focus on creating full exchange rate flexibility so that the value of the yuan adjusts as the country grows. | The IMF says China should focus on creating full exchange rate flexibility so that the value of the yuan adjusts as the country grows. |
| "We urge the authorities to make rapid progress toward greater exchange rate flexibility, a key requirement for a large economy like China's that strives for market-based pricing and is integrating rapidly in global financial markets." | "We urge the authorities to make rapid progress toward greater exchange rate flexibility, a key requirement for a large economy like China's that strives for market-based pricing and is integrating rapidly in global financial markets." |
| The IMF believes that China should aim to achieve a floating exchange rate within the next two or three years. | The IMF believes that China should aim to achieve a floating exchange rate within the next two or three years. |
| "Greater flexibility, with intervention limited to avoiding disorderly market conditions or excessive volatility, will also be key to prevent the exchange rate from moving away from equilibrium in the future." | "Greater flexibility, with intervention limited to avoiding disorderly market conditions or excessive volatility, will also be key to prevent the exchange rate from moving away from equilibrium in the future." |
| Beijing has said that it wants the yuan to become an alternative reserve currency to the US dollar. | Beijing has said that it wants the yuan to become an alternative reserve currency to the US dollar. |
| Slowing growth | |
| The IMF's comments came after a two-week visit by one of its delegations to Beijing, Shanghai and Taiyuan. | |
| The delegation also commented on China's slowing economic growth, which it said was "a by-product of moving the economy away from the unsustainable growth pattern of the past decade". | |
| It expects China's economy to grow by 6.8% in 2015, almost matching the government's target of 7%, with growth then expected to slow to 6.25% in 2016. | |
| "China is transitioning to a new normal, aimed at safer and higher-quality - even if a bit slower - growth," said the IMF, adding that the change was "both challenging and necessary". | |
| "The labour market has remained resilient despite slower growth, which, in turn, has supported household consumption." |