Beijing, October 23:

China has hit back at the International Monetary Fund (IMF) after the organisation pressed Beijing to free up the exchange rate for the yuan, state media reported today. Speaking at the annual meeting of the IMF and World Bank in Washington last weekend, vice-finance minister Li Yong said the Fund should not put too much emphasis on the exact exchange rates of the currencies of member nations.

“The Fund’s exchange rate surveillance should focus on whether a member country’s exchange-rate regime is consistent with its medium-term macroeconomic policies,”

Li said, according to the Xinhua news agency.

China de-linked the yuan from the US dollar in 2005 and has since allowed it to rise nearly 10 per cent against the greenback, but critics of the nation’s trade surplus argue it is not enough.

The IMF said in a recent report that loosening the controls on the exchange rate would make it easier for the Chinese government to carry out economic policies at home.

“A more flexible exchange rate would give monetary policy more scope to focus on domestic objectives, particularly the need to slow lending and investment growth,” it said. Li also reiterated Chinese concerns about new IMF rules on exchange rate policies, known as the Decision on Bilateral Surveillance.