Chinese currency devaluation welcome step, says IMF
BEIJING: China's new mechanism for determining the central parity of its currency "appears a welcome step" as it should allow market forces to have a greater role in determining the exchange rate, the IMF said.
The global financial institution also asserted that China should aim to achieve an effectively floating exchange rate system within two to three years.
China devalued its tightly-controlled currency on Tuesday by two per cent, the biggest one-day fall since a massive devaluation in 1994, as the world's second largest economy grappled with economic slowdown and dwindling exports.
The "new mechanism" for determining the central parity of the Renminbi announced by China "appears a welcome step" as it should allow market forces to have a greater role in determining the exchange rate, an IMF spokesperson said.