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Istanbul (pte021/06.05.2005/11:28) - A study on flexible exchange rates in Asia's developing countries has been called for by Japan's finance minister Sadakazu Tanigaki in the light of increased pressure from the US on China to revalue the yuan against the dollar. The World Bank http://web.worldbank.org has also asked China to make its currency more flexible.
In his speech delivered at an Asian finance ministers meeting in Istanbul on Thursday Tanigaki said that it was "desirable that study toward more flexibility in exchange rates be made for developing member countries that lack such flexibility in order to ease adjustments to economic shocks."
The US claims that the undervalued yuan gives China an unfair advantage when exporting to the world's largest economy.
The annual conference in Turkey of the Asian Development Bank saw the meeting of Southeast Asian finance ministers. However, the ministers declined to comment on how a possible revaluation might affect their economies, or whether China needs to revalue.
Also in Istanbul, China's finance minister Jin Renqing said: "When there's too much speculation, this makes it difficult to implement reform of the exchange-rate regime."
Going against economists' predictions, China's economy expanded 9.5 per cent in the first quarter and has fuelled expectations that lending restrictions will have be set to curb growth.
According to the World Bank's biannual report on the region, China's economy is predicted to expand by 8.3 per cent, which is higher than the original projection of 7.5 per cent.
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