China's Renminbi (RMB) exchange rate reforms would impact slightly on economies in the region and even give a temporary boost to economic activities, said Standard & Poor's (S&P) Ratings Services in Singapore on Monday.

"This is based on the expectation that regional governments are likely to maintain competitiveness because exports, despite recovering domestic demand, remain the mainstay of economic growth, " it analyzed.

Last Thursday, China revalued the exchange rate of the RMB yuan to the US dollar by 2.1 percent to 8.11 from 8.27, and abolished the yuan to the dollar pegging system applied in the past few years.

The Chinese central bank also announced the adoption of a managed float to a basket of foreign currencies, allowing the trading price between the dollar and the yuan to float within a 0. 3 percent band around the official central parity.

S&P predicted that the US dollar would still dominate the basket of currencies in the RMB's managed float and governments in the region would not like to see large diversification.

The world's renowned provider of credit ratings and financial- market indices also pointed out that the change would compel and entrench financial restructuring and liberalization in China.

It warned against more speculative inflows for further appreciation of the currency, suggesting the Chinese government would step forward cautiously.

Source: Xinhua