China's recent move to adjust its central parity system is a step toward a market-oriented exchange rate, former Federal Reserve Chairman Ben Bernanke said Monday.
The move should help market forces play a role in determining the value of currency, Bernanke said at a Brookings event, adding that the Chinese currency has appreciated "very considerably," putting pressure on the Chinese economy.
The People's Bank of China (PBOC) last week announced the decision to improve its central parity system, the starting point for daily forex trading, to better reflect market development in the exchange rate between the Chinese yuan and the U.S. dollar.
Many economists regard the move as a sign of China's taking a further step towards a market-oriented exchange rate system.
