Attack on RMB exchange rate 'unfair'

Updated: 2012-01-28 00:47


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DAVOS, Switzerland - Attack on China's currency exchange rate is totally unfair as the renminbi, also known as yuan, has been continuously appreciating, an adviser to China's central bank said Friday.

"Renminbi exchange rate has probably caused the biggest misunderstanding between China and the world," Li Daokui, a member of the monetary policy committee of the People's Bank of China (PBOC) told Xinhua in an exclusive interview.

"Perceptions about the renminbi exchange rate in the international community are absolutely groundless, as the yuan is probably the only emerging economy's currency that has been rising against the US dollar since August last year," said Li.

"Take India's rupee for an example. The currency has declined about 20 percent against the US dollar, while the yuan has been rising continuously, moderately and progressively," he added.

Since the Chinese government embarked on the reform of renminbi exchange rate mechanism in June 2010, the currency has appreciated by more than 7.5 percent against the US dollar, according to the PBOC.

Taking into account the higher rate of domestic inflation in China than in the United States, the yuan has appreciated even more against the US dollar, according to a report submitted by the US Department of Treasury to the US Congress on international economic and exchange rate policies in December.

The renminbi has risen against the US dollar on a real, inflation-adjusted basis by nearly 12 percent since June 2010 and nearly 40 percent since China first initiated currency reform in 2005, said the report.