Chinese central bank officials have suggested the renminbi is no longer significantly undervalued after six years of gradual appreciation, citing the country’s big February trade deficit.
According to recent released government figures, last month China notched up its biggest monthly trade deficit since 1998, with imports outpacing exports by $31.5bn. “This trade deficit is a positive sign that the renminbi exchange rate is close to its equilibrium level,” Yi Gang, deputy central bank governor, told the National People’s Congress, the annual session of the rubber-stamp parliament.
Zhou Xiaochuan, central bank governor, was more cautious on the sensitive issue of whether the renminbi is fairly valued. Asked whether the February trade deficit meant the renminbi was approaching equilibrium, Mr Zhou said that this was a “good thing”.