Reserve Bank of Australia chief urges China to strengthen yen

Reserve Bank of Australia chief Glenn Stevens on Friday joined calls for China to strengthen the yuan, saying it would be beneficial to the global economy if there was more flexibility.The central bank governor said the matter had been raised in private discussions with Chinese officials.In my opinion, in any objective gauge, the Chinese currency should be higher than it is today, he told a House of Representatives economics committee.There is no shortage of people telling the Chinese authorities that.In recent days Treasurer Wayne Swan repeated warnings on the yuan, urging large developing economies to put in place policies to boost home-grown demand and move towards more market-based exchange rates.Officials argue that the undervalued renminbi gives China an unfair trade advantage, with a low yuan making goods heading to China from other countries dearer while Chinese exports are cheaper to foreign buyers.Beijing has recently shown some signs it is willing to guide the currency higher, with the yuan rising around 6.8 percent against the US dollar since June last year when the country ended its currencys peg to the greenback.They are still doing quite a bit of intervention, Stevens said.It is coming up some, but I think it would be beneficial to the global economy, and beneficial to the Chinese people, if there was more flexibility in that price.Stevens was critical of the political noise that surrounds the issue in Washington which he warned would not help achieve a resolution on the low renminbi.Unfortunately it also gets surrounded by the whole US-China relationship issue. The megaphones come out. Theres a bit of shouting to and fro and actually thats not all that productive, he said.