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ECB welcomes shift in China’s yuan policy

CHINA’S decision to reform its exchange rate system was yesterday welcomed by the European Central Bank (ECB) and the president of the Eurogroup Jean-Claude Junker.

In a statement yesterday it said: “The euro area continues to have a clear interest in a strong and stable international financial system, as excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability.”

However, it urged China to go further in its reforms.

“Given China’s important role in the global economy, we encourage the authorities to allow for greater flexibility of the renminbi effective exchange rate as a means of promoting balanced growth in China and in the world economy.”

National leaders within the Eurozone, including French president Nicolas Sarkozy have said the shift was encouraging.