It is desirable to proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility.
"Much more needs to be done to promote effective global rebalancing, which requires stronger demand in surplus countries and continued progress toward greater exchange rate flexibility, " Mr Lew said.
Exchange-rate flexibility is more trouble than it is worth, advocates say, so abandon it once and for all.
Exchange-rate flexibility (which is a prerequisite for inflation-targeting) can also bring problems.
Moreover, successful monetary union may sometimes require governments that have lost their monetary and exchange-rate flexibility to resort to a more flexible fiscal policy.
As for the stability pact, it seems perverse to impose artificial constraints on borrowing when both monetary and exchange-rate flexibility have just been removed and greater fiscal flexibility may be needed to compensate.
In the long term, living with a fixed exchange rate demands wage and price flexibility.
Even so, China could still introduce some flexibility into its exchange rate, and so regain control of monetary policy, by adopting a wider band or by pegging to a currency basket rather than just to the dollar.
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However, by adopting the euro early, a country forgoes the flexibility of altering its exchange rate to absorb economic shocks.
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Bank Indonesia is more pragmatic than the Bank of Thailand, widening the rupiah's exchange rate trading band to 8% and ensuring more flexibility in monetary policy.
Only then should it consider whether to allow itself more flexibility by, say, linking its exchange rate to a broader basket of currencies and thus abandoning the precious currency board.
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