IMF says China FX policy should continue to allow more flexibility
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[SINGAPORE] China should allow greater flexibility in its exchange rate policy by reducing intervention, as part of its efforts to secure a gradual moderation in growth while pursuing economic reforms, the International Monetary Fund said on Thursday. "To help deliver durable and balanced growth, China needs reforms that reorient the economy away from excessive reliance on real estate, heavy industry, and external demand," the IMF said in its regional economic outlook for Asia and the Pacific.
Implementation of China's third plenum reform blueprint of 2013, including steps to facilitate corporate deleveraging, strengthen local government financial discipline and reforms to state-owned enterprises, is vital for sustainable growth, the IMF said.
As such reforms are fully implemented, China's growth is expected to moderate to 6 percent by 2017 and then stabilise around there, it said.
