Chinese Currency No Longer Undervalued: IMF

China's currency yuan, or Renminbi (RMB), is no longer undervalued as the world's second largest economy is transiting to a new normal at safer and better growth, a senior official with the International Monetary Fund (IMF) said on Tuesday. "Over time the currency has strengthened. It has strengthened in a real fact of sense meaning against all of, when you look broadly, against China's trading partners. And in particular, it has strengthened in the last year, so we believe that the Renminbi is no longer undervalued at this moment," said David Lipton, IMF first deputy managing director, at a press conference after the IMF delegation concluded its 2015 Article IV Consultation with China, an annual economic and financial check-up between the IMF and its member countries. According to the data of the Bank for International Settlements, RMB's real effective exchange rate (REER) appreciated 33 percent in the five years to March 2015. The IMF has launched its five-year review of the Special Drawing Rights (SDR) basket, an international reserve asset that currently includes the U.S. dollar, Japanese yen, British pound and the euro. Whether to add the yuan to the basket is a major issue for this year's assessment. Chinese officials including the central bank governor Zhou Xiaochuan have all called for including RMB in the SDR basket in this year's assessment. Meanwhile, the IMF projected the Chinese economy to grow at 6.8 percent this year, largely in line with the authorities' growth target of around 7 percent, Lipton said. "We see that as resulting from where the economy is slowing somewhat. And the authorities, the government, is allowing some of the vulnerabilities that had built up to be unwound, and in essence by not replacing old credit with new credit, allowing credit growth to slow somewhat. It's bound to be the case that growth slows down a little bit. We think 6.8 is consistent with the government's idea that growth should be around 7 percent," he said. Lipton said it is an appropriate rate which allows for the decrease of some of the vulnerabilities. "There is some risk that with the normalization of the monetary policy in the United States, the capital flows may reverse, and whether it is China or other countries, everyone has to be very aware of that. But in general, I would say that the Chinese economy is still growing well. As I said earlier and the remarks that I made at the press, I think that the Chinese authorities' policies are appropriate, that they have started to work down some of the vulnerabilities, slowing the rate of growth of credit which had created some problems," he said. More on: http://newscontent.cctv.com/NewJsp/news.jsp?fileId=298078 Subscribe us on Youtube: https://www.youtube.com/channel/UCmv5DbNpxH8X2eQxJBqEjKQ CCTV+ official website: http://newscontent.cctv.com/ LinkedIn: https://www.linkedin.com/company/cctv-news-content? Facebook: https://www.facebook.com/pages/CCTV/756877521031964 Twitter: https://twitter.com/NewsContentPLUS