China to make 'significant' yuan flexibility moves
China will make 'significant' moves towards making its currency, the renminbi, fully convertible in the next 3 years, a central bank official told LatinFinance
Yi Gang, director of China's State Administration of Foreign Exchange (SAFE) and deputy central bank governor said in an interview with LatinFinance that the country was "determined to continue market-oriented reform" of its exchange rate.
The current renminbi exchange rate is "very close to its equilibrium level," Yi added.
China's exchange rate and measures to make the yuan fully convertible on capital markets have been closely watched as, when full convertibility is finally allowed, foreign investors would be able to buy and sell yuan-denominated instruments much more easily and tap the financial markets of the world's second-largest economy.
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Among these were currency swaps with other countries, with the Bank of England saying recently it was very close to an agreement to do such a swap with the People's Bank of China.
"You will see significant development in the convertibility of the RMB within the next 3 years," Yi told LatinFinance.
There is no official timetable for the yuan's convertibility. Back in 2011, an EU official said that Chinese officials had said that the yuan would become fully convertible by 2015, according to a report by Bloomberg at that time.- follow us on twitter @emrgingmarkets