ISTANBUL, May 5: Japan favours more flexible exchange rates in Asia but understands that China may have its own reasons for not relaxing controls on its currency, Japan’s Finance Minister Sadakazu Tanigaki said here Thursday. Speaking on the sidelines of the Asian Development Bank (ADB) conference in Istanbul, Tanigaki said “it would be desirable to see a more flexible exchange rate regime,” among developing ADB member countries, including China.

“The flexible exchange rate can be one of the factors contributing to correcting the imbalances,” in the world economy, Tanigaki said, adding that “in overall terms, it is desirable to see further flexibility in the exchange rate regime.”

But “China has its own challenges to tackle,” he added. “There are issues on the financial front, issues on regional disparity, so perhaps China is having its own difficulty in trying to address its own agenda,” Tanigaki said.

He said relaxing exchange rate controls is “a delicate decision on the part of China — we hope China can make an important decision soon.”

There have been calls for China, the world’s largest exporter, to relax controls on its foreign currency but finance officials gathered in Istanbul for the ADB meeting have said the issue was not directly taken up here.

Tanigaki said that at a meeting with Chinese Finance Minister Renqing Jin on Wednesday, Jin said: “China is willing to respond in a responsible manner and it is only natural in view of the power and strength that the Chinese economy has at the moment.”

“It is not right to correct the imbalances only through the adjustment of the exchange rate,” Tanigaki added.

ROBUST GROWTH: Asian nations will enjoy robust growth in the near future, business experts, academics and multilateral institutions agreed at ADB annual conference here on Thursday. However some analysts warned certain risks remained and that growth in some countries would slow down.—AFP