SANTIAGO, May 30: China is technically ready to move to a flexible exchange rate, IMF chief Rodrigo Rato said at a news conference in Chile on Monday, reiterating the multilateral agency’s stance on the yuan currency. “A more efficient Chinese economy is better for the world economy,” the International Monetary Fund’s managing director also told the news conference.

China’s yuan currency is pegged in a narrow band at around 8.28 per dollar. The United States, which has a $162 billion trade deficit with China, has made increasingly urgent demands on rapidly-growing China to let its currency trade more freely.

Chinese officials say they are taking a cautious approach to shifting the decade-old peg. The IMF chief also told the news conference that the Latin America’s regional economy would grow 4.4 per cent this year, raising the agency’s forecast from a previous outlook of 4.1 per cent.

“After growing 5.5 per cent last year, the best growth in 10 years, we expect growth of more than 4 per cent, 4.4 per cent this year,” he said. Robust local demand and business investment are driving growth this year, the IMF said in a report released in April.

But Rato said the growth rate was not high enough to help the region reduce poverty levels. Rato did not say what economic sectors or countries contributed to the stronger outlook.—Reuters