Yuan reform has little impact on exporters
(AFP)
Updated: 2005-10-31 20:39

The revaluation of China's currency this year has had minimal impact on the country's exporters, according to a central bank survey.

A survey showed that the revaluation of China's currency has had minimal impact on the country's exporters. [AFP]

"The yuan exchange rate mechanism reform has had little impact on Chinese traders," the People's Bank of China said in the Financial News, a central bank publication.

"China's rapid export growth is likely to be maintained," it said Monday.

The study of 2,458 Chinese exporters found that confidence hit a record high in the third quarter and a further improvement was expected in the current fourth quarter.

The central bank pushed through a 2.1 percent revaluation of the yuan on July 21 despite opposition from within the government, in particular the Ministry of Commerce which warned that a stronger currency would hit Chinese exporters.

Exports were up 31.3 percent in the first nine months of the year, year-on-year, down negligibly from the 32.7 percent growth in the first half.

The survey also found that Chinese residents were selling dollars for yuan following the July 21 revaluation despite the government's attempts to temper expectations of further appreciation of the local currency.

The survey found 37 percent of respondents indicated they were selling dollars, up 2.2 percentage points from the second quarter and 4.4 percentage points over the same period last year.

That compares with 33.5 percent of people engaged in foreign exchange transactions who say they saved dollars, which was down 3.4 percentage points compared with the second quarter and down 5.2 percentage points compared with the same period last year.

"The confidence among individuals in US dollar-dominated assets has weakened significantly and the willingness to sell US dollars has grown," the central bank said.

The bank has raised US dollar deposit interest rates three times, with the first just moments before the revaluation announcement on July 21, in a bid to keep money out of yuan assets and so ease pressure on the currency's value.