Renminbi to rise 13% by year end, says MerrilBeijing will revalue the renminbi by 13 per cent at the end of the year to cool an overheating economy, Merrill Lynch predicted on Wednesday.
"We think China will make a big move this year," T.J. Bond, chief Asia-Pacific economist for the investment bank, told reporters at the launch of a report on Beijing's controversial foreign exchange regime.
Mr Bond said the renminbi, which trades in a very narrow band around Rmb8.28 to the US dollar, would probably be revalued by 10 per cent against the dollar and would then be pegged to a basket of currencies in a 5 per cent band, whereupon it would rise from an initial midpoint to the top of its range. The basket was likely to be dominated by the dollar, the yen and the euro.
By Victor Mallet and Francesco Guerrera in Hong Kong
FT.com