WASHINGTON -- The International Monetary Fund said Friday China remains reluctant to float its currency.
In its discussions with Chinese authorities about the country's economy, the IMF said the government was concerned even making overtures to end pegging the yuan to the dollar could lead to a flight of capital from the country.
The IMF, on the other hand, said a flexible foreign exchange rate regime might be achieved with minimal disruption by widening the exchange rate band, and potentially move towards forming a currency basket.
Since 1995, China has fixed the rate of the yuan to the greenback at 8.3, and many analysts have argued the currency is kept deliberately low so Chinese products can be cheaper and thus more competitive in international markets.
The latest talks between the Washington-based agency and the Chinese government took place in July, and this was the first time an extensive report of the discussions was released publicly.
