Yuan should appreciate in long term -China c.banker

SHANGHAI, March 9 - China's yuan should appreciate over the long term, but there is no need yet to push aggressively for a larger international role for the currency, Chinese central bank vice governor Yi Gang was quoted as saying by official media on Monday.

The state-run China Securities Journal also quoted Yi as saying that China was not experiencing classic deflation and that the central bank had sufficient monetary policy tools to respond to deflation. Yi said consumer prices may show year-on-year declines in some of the months ahead, given strong year-ago figures, but he added that Chinese credit and money supply growth are relatively strong and said there was a good possibility that China's economy will achieve 8 percent growth this year.

Although he said interest rates had room to decline, the amount of leeway is not great, suggesting a move toward zero interest rates was not China's best policy option.

Yi said that in the overall structure of global currencies, the yuan ought to appreciate over the long term.

He added that the global financial crisis held the possibility for promoting internationalisation of the yuan, but there was no need to push this deliberately.

Source: http://news.alibaba.com/