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China’s currency ‘no longer undervalued,’ IMF says, clearing entry to SDRs

gata.org / By Tom Mitchell and Shawn Donnan, Financial Times, London / May 26, 2015

The International Monetary Fund has declared that China’s currency is “no longer undervalued,” marking a significant shift after more than a decade of criticism of Beijing’s tight management of the renminbi.

The move amounts to a major vote of confidence in Beijing and the renminbi at a critical time. It also puts the IMF at odds with its biggest shareholder, the United States, which insists that China continues to draw an unfair trade advantage from a renminbi that it considers “significantly undervalued.” …

The renminbi has gained 25 per cent against the US dollar since it was allowed to adjust upward within a narrow band a decade ago, and has held its value even as the dollar has strengthened against other major currencies over the past year.

SOURCE

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