BEIJING, May 18: China said on Friday that it will widen its currency’s trading band and raise interest rates but major partners and analysts urged Beijing to go still further to help trim huge trade imbalances. The US and Japan reacted promptly to the announcement, urging China to use the wider band to let the yuan trade more freely.
“The US and Japan both want China to further increase flexibility on exchange rates,” Japanese Finance Minister Koji Omi told media in Potsdam, Germany, following bilateral talks with US Deputy Treasury Secretary Robert Kimmitt. The value of the yuan is a major source of trade friction between the US and Japan on the one hand and China on the other. Washington and Tokyo believe the Chinese currency is kept low to give exporters an unfair advantage.—AFP
