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Interview with Xinhua, Mr Pang Xiusheng, Chief Financial Officer of Bank of China
Construction said banks holding assets that the dollar will be great damage if the yuan
continues to rise as today .
Zhu Min, an assistant president of Bank of China (BOC) said BOC will closely monitor
the yuan exchange rate and its impact on the financial management activities.
Foreign currency reserve assets of BOC is considered to be the largest among domestic
banks, long a concern of investors' shares of the bank, especially if the yuan continues
to rise.
Under the control of the monetary policy of China, banks are forced to buy a large
amount of foreign currency earned from export activities, increase the value of the
dollar and trading assets in other currencies.
US manufacturers say the yuan is undervalued makes Chinese goods exported to the
US cheaper and US goods more expensive in China, causing damage to the US labor
market.
July last year, the Chinese renminbi has appreciated by 2% against the dollar and give
policy hard pinned against the dollar.
Since then, the yuan has risen 3.7% against the dollar. Last week, the yuan has risen
sharply, up to 123 points on Wednesday (16/8). Meanwhile the official exchange rate is
7.9703 yuan / dollar.
Report of the Executive Committee Bank of China said the yuan appreciation, albeit
slow, banks will be increasingly difficult to get people to buy foreign currency in order to
share the risk through active currency exchange or other financial instruments.