MNI: Top China Official Sees Yuan as 'Anchor Currency'

     BEIJING (MNI) - One of China's top financial officials said Thursday that

he is confident the yuan will become one of the world's "anchor currencies."

     Huang Qifan, vice director of the National People's Congress Financial and

Economic Affairs Committee and the former mayor of Chongqing, expressed his

confidence in the yuan's internationalization at the annual Caixin Summit, which

gathers top economic, political and academic leaders. 

     Huang said the yuan would become a major currency for international trade

and transactions, an investment currency and a safe-haven currency "just like

the U.S. dollar" during China's process to further grow its economy. He noted

that China's reformed monetary policy, offering "efficient guidance" on China's

economic development, would credibly boost the yuan on the international market.

     Yu Yongding, former member of the monetary policy committee at the People's

Bank of China, also said at the forum that "there is no better time than now to

let the yuan float freely."

     Yu said a free-floating exchange rate for the yuan is key to preventing the

further worsening of China's "imbalanced" excess foreign reserves problem, which

he attributed to the PBOC's previous intervention in the currency market.

     Other analysts who also attended the summit were equally positive about the

yuan's internationalization.

     Shen Minggao, chief economist of Guangfa Securities, said yuan-denominated

assets would become increasingly popular over the next 20 or 30 years.

     Shen said China's current moves to increase economic independence, such as

switching its economic growth model from relying heavily on exports to a more

diversified growth track, would attract more international investment into

yuan-denominated assets, boosting the yuan.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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