Media, experts and scholars from overseas share the view that the adjustment of the exchange rate mechanism of the Chinese currency by China's central bank is an important move to promote the marketization of the renminbi and would not lead to the slump of the currency, let alone a "currency war."
PROMOTING MARKETIZATION OF RMB
Annika Breidthardt, coordinating spokesperson for Economic and Financial Affairs of the European Commission, lauded the move, saying that "we consider this a positive development" as the value of any currency should be determined by economic fundamentals.
Tang Zhimin, director of China ASEAN Studies under Bangkok-based Panyapiwat Institute of Management, believes that Beijing is inclining to marketize the exchange rate of the RMB, which plays a positive role in the internationalization of the currency.
Yang Zhao, chief economist of Nomura China, said it is a "pivotal step" of the People's Bank of China (PBOC) to transform the country's financial reform into a market-based one.
"In terms of timing, the PBOC might have taken into account the weakening economic growth and market expectation of RMB depreciation, so that the liberalization will lead to a depreciation to support China's growth somehow," Zhao said.
FACILITATING RMB'S ENTRY INTO SDR
Correcting the discrepancy between the central parity rate and the actual trading rate of the RMB, Tang said, would facilitate the internationalization of the currency and its entry into the currency basket of Special Drawing Rights (SDRs) by the International Monetary Fund (IMF).
