China, S'pore central banks seek cooperation

China, S'pore central banks seek cooperation

Dow Jones, Denpasar

Chinese central bank Governor Zhou Xiaochuan met with the
managing director of the Monetary Authority of Singapore, Heng
Swee Keat, on Sunday to discuss economic and financial
cooperation between the two central banks.

Zhou said that they did not discuss the possibility of China
adopting a foreign exchange regime similar to Singapore's model,
as some recent media reports had speculated.

"We didn't talk about that," Zhou said at a central bankers
conference on the Indonesian resort island of Bali. "I think
China is studying our own reform, our way, but certainly we know
that there are different schemes to undertake reform."

Singapore's central bank manages the value of the Singapore
dollar against a basket of currencies of its major trading
partners. In China's foreign exchange system, the yuan trades
within a narrow band around 8.28 yuan to the dollar. The U.S. and
other countries have been pressuring China to loosen its tightly
managed peg, arguing the Chinese currency is undervalued.

"I think the size of the (China's) economy, the stage of the
development is different from Singapore," Zhou said after a one-
hour meeting with Singapore's Heng.

Asked if China's central bank, the People's Bank of China, is
looking for different options in managing exchange rates, Zhou
said that the bank is studying all options.

But he was quick to add that "it's a very general study,
there's not any news about the (China's) exchange rate policy."

Zhou met Heng after they attended a one-day meeting of 11
central banks' chiefs from East Asia and Pacific on Saturday on
the resort island.

Heng declined to give any comment after the two central banks
met.