China's central bank governor acknowledged today that Beijing is using its controversial exchange-rate controls to cope with the global economic crisis and said it will be cautious about retreating from the policy.
Governer Zhou Xiaochuan's comments come as Beijing faces rising pressure to ease controls that Washington and other trading partners say keep its yuan undervalued, swelling its trade surplus.
President Barack Obama says he will press for an end to currency systems that he says depress export prices and hurt American companies.
At a news conference during the annual meeting of China's ceremonial legislature, Zhou said a "special foreign exchange mechanism" is part of Beijing's crisis response.
China has held the yuan steady against the dollar since late 2008 in an apparent effort to help China's exporters compete abroad, though authorities have never openly confirmed that.
Obama vowed last month to "get much tougher" with China in trade disputes.
Some American companies are pressing Congress to enact punitive tariffs on Chinese goods if Beijing fails to act. Critics say the yuan is undervalued by up to 40 per cent.
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