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<P><EM>BEIJING--Central bank Gov. Zhou Xiaochuan said China will eventually move
away from its current exchange-rate policies, which he described as a temporary
response to the global financial crisis, but downplayed the idea that a move
could come in the near future.</EM></P>
<P><EM>Mr. Zhou's comments Saturday at a press conference were the most direct
suggestion to date by a Chinese official that the yuan's current de-facto peg to
the dollar will not be maintained indefinitely. Previously, government officials
have stressed currency stability without much qualification, and rejected
foreign pressure to allow the yuan to strengthen.</EM></P>
<DIV class=insetContent><EM>Mr. Zhou said the current policy – which has kept
the yuan's value basically unchanged against the dollar since July 2008 – was a
"special measure" adopted in unusual circumstances. "This is a part of our
package of policies for dealing with the global financial crisis," he said.
"These kinds of policies sooner or later will be withdrawn."
<P><EM>Economists and currency-market participants increasingly expect that
China will at some point this year allow its currency, which is formally known
as the renminbi, to rise against the U.S. dollar. Inflation in China is picking
up as the economy recovers, a problem many economists say a stronger currency
could address. </EM></P>
<P><STRONG><FONT size=5>stronger yaun = weaker dollar = ?</FONT></STRONG></P>