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China’s strengthening yuan to curb the rise in commodities prices may not be an appropriate policy measure, the state-owned Economic Information Daily reported, citing a Chinese expert.

Key takeaways

China shouldn’t focus on a continued yuan appreciation to reduce the cost of imports and price levels.

“RMB appreciation may not be a good way to deal with commodity price rises.”

“From a policy perspective, yuan exchange rate policy is acting as an important monetary policy tool. Structural increases in commodity prices in global financial markets do not mean significant inflationary pressures will occur globally.”

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