Greater say needed on yuan's convertibility

BEIJING - China won't refuse to make its currency increasingly convertible under the capital account, but the country needs a greater voice in defining "full convertibility" globally, said Zhou Xiaochuan, the governor of the People's Bank of China (PBOC).

"Because the International Monetary Fund (IMF) currently doesn't have specific standards on convertibility under the capital account, the definition of 'full convertibility' is discussable," said Zhou in an article published on Friday in the latest issue of China Finance Magazine, which is run by the PBOC.

Therefore, the standards should be more flexible and China should participate in formulating methods to measure a currency's convertibility under the IMF framework, he said.

Earlier this week Zhou said that the yuan will be freely convertible soon. "Now, we are not too far away from our goal of convertibility," he was quoted as saying by Caixin.com.

The official Chinese timeframe for the realization of full convertibility of the yuan is prior to the end of 2015.

Zhou added that currency convertibility doesn't mean giving up control of cross-border financial transactions, and said that it is reasonable to curb speculative capital flows when the international market registers unusual volatility.

"Convertibility should be based on the necessary management of the country's foreign debt. Yuan convertibility doesn't mean that anyone can borrow money in the global market freely."