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Zhou Xiaochuan -- China's present Mr.RMB

2009-09-30 09:20 BJT

China has had 11 central bank governors over the past 60 years. Zhou Xiaochuan, the current governor, is known as "Mr. RMB." He was a key figure in de-pegging the Yuan from the US dollar in 2005.

Zhou Xiaochuan: Mr. RMB?

"I don't like the nickname. Japan's former top currency official, Eisuke Sakakibara, gained the name of Mr. Yen. It is because his comments directly affected the Yen's exchange rate. Our RMB exchange regime is different from that of Japan's. We could not influence the RMB's value and we don't frequently intervene in the forex market as Mr. Yen did. "

Zhou Xiaochuan: A strong RMB!

"Firstly, A strong economy should be paired with a global currency. Secondly, we've successfully kept inflation under control."

Zhou Xiaochuan: a right direction!

"The first major forex reform was in 1981. We doubled RMB forex rates from 1 yuan to 2.7 yuan for one US dollar, offering a strong boost to exports. By the end of 1984, forex reserves began to rise. In 1985, we put trade and non-trade foreign exchange together. We unified the official RMB exchange rates and foreign exchange markets in January 1994. We moved toward making the RMB tradable under the current account. And then came reform of the forex regime in 2005. Through a gradual process, the reforms in China's forex regime are going in the right direction."

Zhou Xiaochuan: taking aim at the dollar?

"It was popular at the beginning of this year. There were opinions that imbalances are responsible for the global financial crisis. They brought up trade imbalances, and blamed China for high deposit rates and the RMB exchange rate. So I tried to strike back in my articles. I asked them to be fully aware of the problems of the world economy and then we could reform the global financial system."

Zhou Xiaochuan: The 4 musts

"A stable RMB is no longer only a domestic issue. We have to consider from a global angle. We have 4 musts in a bid to have a stable RMB value. They are: low inflation, economic growth, improved employment and balance of international payments."

Editor: Xiong Qu | Source: