IMF: yuan rate in line with fundamentals
THE International Monetary Fund said on Friday that China’s renminbi, or yuan, exchange rate is broadly consistent with fundamentals and desirable policies.
“The renminbi, despite moving closer to the level consistent with overall assessment, remained broadly in line with fundamentals and desirable policies,” said the IMF in its latest External Sector Report released on Friday.
According to the report, in 2016, the average real effective exchange rate depreciated by about 5.1 percent compared to 2015, reflecting in part the strengthening of the US dollar.
China’s policies that were put in place to stabilize the growth has led to recent appreciation of the yuan, and helped to ease capital outflows and foreign exchange reserve loss, Luis Cabeddu, IMF research department’s division chief said at a press briefing on Friday.
The IMF said China’ s external imbalances have fallen considerably since the global financial crisis.
China’s current account surplus fell to 1.7 percent of GDP in 2016, off its peak of 10 percent of GDP in 2007, the IMF said.