- Title: CHINA: CHINA WAKES UP TO NEW EXCHANGE RATE FOR YUAN, LATEST.
- Date: 22nd July 2005
- Summary: (W1) BEIJING, CHINA (JULY 22, 2005) (REUTERS) 1. GV: INTERIOR BANK OF BEIJING 0.06 2. CU/MV/CU/.PAN: CURRENCY BOARD SHOWING NEW YUAN RATE 811'00; STAFF WORKING IN FRONT OF BOARD; BOARD SHOWING NEW EXCHANGE RATE (3 SHOTS) 0.33 3. MV/CU: CUSTOMER AT COUNTER; WORKING STAFF COUNTING U.S. DOLLARS; HALL OF BANK OF BEIJING; STAFF COUNTING RENMINBI (6 SHOTS) 1.12 4. MV/CU: CUSTOMER, LAI XIAOSHENG, 25, READING NEWSPAPER, NEWSPAPER SAYING "TWO PER CENT" REFLECTING NEW EXCHANGE RATE, CLOSE OF NEWSPAPER (2 SHOTS) 1.23 5. (SOUNDBITE) (Mandarin) LAI XIAOSHENG SAYING: "It's good for our imported goods because things will get a little cheaper, we can get a much more reasonable price in terms of buying cars and imported stuff. Also the revaluation of the yuan shows that China is becoming more powerful." 1.38 6. GV: HALL INSIDE HOTEL 1.43 8. MV/CU: STAFF LOOKING AT FOREIGN EXCHANGE BOARD INSIDE HOTEL (2 SHOTS) 1.52 9. GV/TILT DOWN/CU: NEWSPAPER STALLS; NEWSPAPER HEADLINES ABOUT REVALUATION (2 SHOTS) 2.06 10. GV/MV/CU: OFFICE WORKER YU WAI CROSSING THE ROAD; READING NEWSPAPER; NEWSPAPER (3 SHOTS) 2.19 11. (SOUNDBITE) (Mandarin) YU WAI SAYING: "This doesn't affect the lives of ordinary people very much because most people don't hold that many dollars so I don't think our daily lives has anything to do with the revaluation of the yuan, but it will be a big deal for rich people and people who make money out of trading currency." 2.43 12. (SOUNDBITE) (Mandarin) MR. ZHANG, BANK OF CHINA FOREIGN CURRENCY MANAGEMENT BUREAU, SAYING: "The yuan has been revalued. This is bad for our exports. In terms of ordinary people, it's not a big deal, but for trade it is since the exports to other countries will become more expensive so I think we will be able to export less." 3.12 13. CU: ZHANG READING NEWSPAPER 3.17 14. (SOUNDBITE) (Mandarin) ZHANG SAYING: "We are not doing this because of pressure. The Central Bank and State Council has its own agenda in adjusting the currency. We are managing this ourselves. The revaluation of the yuan is not just because of overseas pressure, it is the result of many factors." 3.46 15. GV: STREET SCENES 3.51 16. GV/MV/CU: STALL; PEOPLE HOLDING YUAN TO BUY THINGS; PLATE OF SNACKS; STALL HOLDER COUNTING MONEY (6 SHOTS) 4.17 17. GV: EXTERIOR CENTRAL BANK 4.23 18. CU: CHINESE NATIONAL FLAG 4.30 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 6th August 2005 13:00
- Keywords:
- Location: BEIJING, CHINA
- Country: China
- Reuters ID: LVACDMV07HU8B6PWAVYP35LN66N6
- Story Text: China wakes up to a new exchange rate for the yuan.
Bowing to two years of political and market
pressure, China on Thursday (July 21) revalued the yuan by
2.1 percent - abandoning the currency's decade-old peg
against the dollar.
At banks throughout the city on Friday (July 22), the
new rate was reflected on exchange boards.
Analysts described the move as modest and said it would
have a limited economic impact.
But they said the shift potentially marked a critical
step by China's policy makers toward giving more play to
market forces.
While the change will have a limited impact on ordinary
Chinese, some were looking forward to cheaper imported
goods.
"It's good for our imported goods because things will
get a little cheaper, we can get a much more reasonable
price in terms of buying cars and imported stuff. Also the
revaluation of the yuan shows that China is becoming more
powerful," said 25-year-old Lai Xiaosheng, a bank customer.
Hotels in the city were also quick to adapt to the
change. Tourists will find their U.S. dollars so a little
less far in the future.
The U.S. has applauded the shift.
The yuan has been fixed near 8.28 per dollar since
1996, but now it will be tied to a basket of currencies of
China's main trading partners.
As newspapers reported the reform, locals said it would
not affect them on a big scale.
"This doesn't affect the lives of ordinary people very
much because most people don't hold that many dollars so I
don't think our daily lives has anything to do with the
revaluation of the yuan, but it will be a big deal for rich
people and people who make money out of trading currency,"
said Yu Wai.
The central bank said the yuan would be allowed to move
in a tight range of 0.3 percent up or down from the
previous day's close -- the same flexibility China has had,
but chosen rarely to use, since it adopted a "managed
float" policy in 1994.
An official with the Bank of China said the revluation
might have a negative impact on exports.
"The yuan has been revalued. This is bad for our
exports. In terms of ordinary people, it's not a big deal,
but for trade it is since the exports to other countries
will become more expensive so I think we will be able to
export less," said Mr. Zhang, from the Bank of China
Foreign Currency Management Bureau.
But Zhang said the move had not come about because of
intense pressure from overseas.
"The yuan has been revalued. This is bad for our
exports. In terms of ordinary people, it's not a big deal,
but for trade it is since the exports to other countries
will become more expensive so I think we will be able to
export less," said Zhang.
With China's initial revaluation falling well short of
the 10 percent move that Washington had been seeking, there
has been speculation that this would be the first in a
series of gradual moves.
But the central bank said big movements in the yuan
would harm the economy, which has become a major engine of
world growth since China threw its markets wide open by
joining the World Trade Organisation in 2001.
Foreign pressure has been especially intense in the
United States, where many law-makers blamed their country's
162 billion U.S. dollars (USD) 2004 trade deficit with
China on an artificially cheap yuan, which they said handed
Chinese exporters an unfair advantage.
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