Nouakchott, May 22 :

Visiting Chinese foreign minister Li Zhaoxing and his Mauritanian counterpart Ahmed Ould Sid Ahmed signed a two million dollar cooperation agreement in the economic, health and socio-cultural sectors.

They told a joint news conference that they had discussed cooperation in oil but did not sign a deal, after a Mauritanian foreign ministry official said before the talks that an oil deal was in the works. China is in the market for new oil sources, notably in Africa, to support its rapidly expanding economy. A first delivery of Mauritanian oil was sold to a Chinese company in April.

Mauritania began producing its own oil in February, and its current unfavourable trade balance with China is likely to be offset by future oil deliveries to China, observers here said.

Li, who was to leave Nouakchott on Monday, met yesterday with president Ely Ould Mohamed Vall, who interrupted a trip to the north of the country to “show the importance he accords to cooperation with China,” Sid Ahmed said.

China has been a major supplier of modern infrastructure to Mauritania.

Yuan to be more flexible

SHANGHAI: China has reiterated its long-standing pledge to boost the flexibility of the currency this year although it will also ensure that the yuan rema-ins stable at a reasonable level.

In its annual report, the People’s Bank of China promised to make the yu-an exchange rate more fle-xible while keeping the un-it at a reasonable and balanced level. The central bank also said that it had a combination of tools — interest rates, open market operations and commercial bank deposit reserve requirements — to control credit growth. — AFP