Nobel laureates: Yuan exchange rate up to Chinese govt

The exchange rate of the yuan should be chosen by the Chinese government, two Nobel economics laureates said on Friday amid accusations of undervaluation by other countries.

US economist Edward Prescott and Norwegian economist Finn Kydland made the remarks during a conference held in the southeastern city of Shenzhen, which borders Hong Kong. The two shared the Nobel Prize for Economics in 2004.

Prescott said rapid appreciation of the yuan could create pressure for domestic exporters. Decisions regarding the currency’s exchange rate should be left up to the Chinese government, he said.

Last month, the US Senate passed the Currency Exchange Rate Oversight Reform Act of 2011, a bill that has largely been seen as a move to push China to let the yuan appreciate further.

The view held by many Americans that China’s development has hurt the US is false, Prescott said, adding that cooperation, interaction and competition are essential and helpful for both countries.

Kydland said the US government should not interfere with the currency’s exchange rate.

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