Lagarde calls yuan appreciation 'positive': AFP interview

9th June 2011, Comments 0 comments

French finance minister Christine Lagarde said Thursday in an interview with AFP that the appreciation of China's yuan against the dollar was a "positive movement" and should continue.

Beijing, which tightly controls the value of its currency, has allowed the unit to strengthen more than five percent against the dollar since pledging a year ago to let it trade more freely following intense international pressure.

"This is a positive movement and I think this movement of appreciation must continue," Lagarde, a top contender to be the International Monetary Fund's first female managing director, said on the final day of her trip to Beijing.

China faces growing calls from major trade partners, including the United States and Europe, to let the yuan strengthen at a faster pace.

Critics claim the currency is grossly undervalued, making Chinese exports artificially cheap and giving domestic manufacturers an unfair advantage.

On Thursday, China's central bank set the yuan central parity rate -- the midpoint of the currency's allowed trading band -- at 6.4830 to the dollar, weaker than Wednesday's rate of 6.4795.

Lagarde later told reporters that the IMF would help China achieve its oft-stated goal of making the yuan more widely used overseas but noted the process should be gradual.

"The IMF will indeed contribute to the internationalisation and will help in facilitating the process," she told a news conference.

"The process has already begun .. gradually, not in a revolutionary fashion, not just overnight because I think such changes that are welcome should take place over time."

Lagarde, a 55-year-old former international lawyer, spent the day Wednesday meeting senior Chinese officials after a similar visit to India, as she tries to persuade sceptical emerging economies to back her IMF bid.

China, India and other emerging nations have baulked at Europe's traditional lock on the leadership of the Washington-based IMF, calling the arrangement outdated, and so far have been non-committal in public about her bid.

"I am very satisfied with the meetings I've had in China," Lagarde told AFP.

"I have a very positive feeling following these talks, but it's up to them to convey their decision," she said.

Lagarde met Foreign Minister Yang Jiechi, central bank governor Zhou Xiaochuan, Finance Minister Xie Xuren and Vice Premier Wang Qishan -- China's top official on financial affairs.

© 2011 AFP

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