July 21, 2005
JS-2648

Statement by Secretary Snow on Reform of China's Currency

I welcome China's announcement today that it is adopting a more flexible exchange rate regime.

As we have said, reform of China's currency regime is important for China and the international financial system.

I particularly noted China's objective of allowing the market to fully play its role in resource allocation as well as "to put in place and further strengthen the managed floating exchange regime based on market supply and demand."

We will monitor China's managed float as their exchange rate moves to alignment with underlying market conditions.

China's full implementation of its new currency regime will be a significant contribution toward global financial stability.

The international economy performs best with free trade, the free flow of capital, and flexible currencies.

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