Lipsky (IMF): to contain inflation, Beijing must let the yuan appreciate

The International Monetary Fund has asked China to let the yuan appreciate further to rebalance its economy, suggesting the use of more orthodox tools, such as interest rates, to fight inflation. The solicitation came from interim head of the financial institution John Lipsky during a press conference held today in Beijing. Lipsky also reiterated that in time the yuan could be included in the Special Drawing Rights (SDR), an accounting unit used by the IMF whose value today is determined by the dollar, euro, pound and yen. Lipsky also underlined the importance of the growth of Chinese domestic consumption in reducing Beijing's trade surplus, underlining how the recent reforms aimed at increasing family incomes and improving social safety nets go in the right direction. In a statement, the Fund also praised the efforts made to date in the direction of a more controlled monetary policy, underlining however that the risk of the formation of bubbles has not yet been completely averted.