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China will reform its foreign exchange system in an orderly way and will not bend to pressure from the US to float the yuan, governor of the People's Bank of China, Zhou Xiaochuan has asserted.
China has its "own principles" to carry out its exchange rate reform and the current rate is appropriate, Zhou was quoted as saying by 'China Daily' on Monday.
In response to the recent fall of the yuan on the international market, Zhou said it was mainly determined by the supply and demand force in the market. He said the dollar was a little stronger against the euro and the yen, thus affecting the yuan.
He said that although the main theme of the World Bank and International Monetary Fund meeting in April is about the global economic disparity, discussion with the US on bilateral issues would be also unavoidable, without elaborating whether currency reform will be involved.
US Treasury Secretary John Snow again urged China to float its exchange rate on Friday.
There are reports that he is under mounting pressure from the US lawmakers to label China a 'currency manipulator' in a report due in April.
US President George W. Bush also said that he would adopt further movement to press China to appreciate its currency soon.
China's major trading partners led by the United States has been criticising Beijing's currency policy by arguing that the yuan is artificially low, giving Chinese exporters an unfair advantage, contributing to US trade deficits and hurting its labour markets.
The yuan has floated less than one per cent since China re-valued it and discarded its peg on the greenback on July 21 last year.
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