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UPDATE 1-China says it will keep yuan basically stable

Published 11/24/2009, 03:35 AM
Updated 11/24/2009, 03:39 AM

(Adds quotes)

BEIJING, Nov 24 (Reuters) - China will keep the yuan's exchange rate basically stable at a reasonable and balanced level, Vice Foreign Minister Zhang Zhijun said on Tuesday.

Zhang's words were a restatement of China's long-standing policy towards the yuan, also known as the renminbi.

But the same phrasing was conspicuously absent from the central bank's recent third-quarter monetary policy report, which fanned speculation of a possible shift in China's policy of keeping the yuan pegged tight to the dollar.

"This year, to counter the global financial crisis, the renminbi exchange rate has been kept basically stable at a reasonable and balanced level," Zhang told reporters at a briefing about next Monday's regular China-European Union summit in the eastern city of Nanjing.

Zhang repeated China's long-held position that it would proceed with currency reform on its own initiative and in a controllable manner, managing the exchange rate against a basket of currencies.

A trio of European Union policymakers is due to hold talks on Sunday in Nanjing with officials including Premier Wen Jiabao and Zhou Xiaochuan, the governor of the People's Bank of China.

The three are European Central Bank Governor Jean-Claude Trichet; Luxembourg Prime Minister Jean-Claude Juncker, who chairs the Eurogroup of euro-zone finance ministers; and Joaquin Almunia, the EU's commissioner for economic and monetary affairs.

"As for what is discussed in those meetings, we will have to wait and see," Zhang said. (Reporting by Chris Buckley; Writing by Alan Wheatley; Editing by Ken Wills) ((alan.wheatley@thomsonreuters.com; +86 10 6627 1235; alan.wheatley.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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