SHANGHAI, China, 27 June /Xinhua-PRNewswire/ --
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Indicator Value Change
March 2007:202.7
February 2007: 200.1
Month-to-month change:1.30%
March 2006: 180.2
Year-to-year change: 12.46%
Click http://www.xinhuafinance.com/en/charts/ipo_rpi/0706/rpi_chart0706.jpg to download the chart.
Highlights
In March 2007, the Renminbi Pressure Indicator (RPI) score increased by 1.30 percent as China＊s foreign exchange reserves rose to US$1.20 trillion. The interest rate rose 0.27 percentage point as the government tried to slow down investment growth.
Analysis
Yuan appreciation and mounting foreign exchange reserves continued to push the RPI higher in March to 202.7, or 1.30 percent over the previous month. Foreign exchange reserves rose by US$44.7 billion in March, which reflected a 50 percent increase in China＊s trade surplus in February. This was the second-largest value increase since the revaluation of the yuan in July 2005. For the period, the increase in foreign exchange reserves accounted for 1.28 percentage points, while exchange rate appreciation accounted for 0.02 percentage point. In regards to the April and May values, although foreign exchange reserves are not yet known, the monthly yuan appreciation rate grew to 0.40 and 0.69 percent, respectively (from 0.07 percent in March), while the interest rate was unchanged. The trade surplus declined to $6.9 billion in April before growing to US$16.8 billion in May. Despite the 8.18 percent yuan appreciation since July 2005, the growth in trade balance and foreign exchange reserves has shown no sign of slowing down and will likely continue to drive the upward movement in the indicator.
Methodology
The RPI is based on a monthly examination of the interaction between the following variables to compute overall cumulative exchange rate pressure: the percentage change in the spot exchange rate, the percentage change in foreign exchange reserves, and the change in domestic interest rates. The indicator measures the pressure on China＊s currency relative to the U.S. dollar. It is set equal to 100 on January 1, 2000. Increases in the RPI reflect appreciation pressure on the renminbi (RMB).
Xinhua Finance/Milken Institute China Indicators
The Xinhua Finance/Milken Institute China Indicators are aimed at providing investors, analysts, and financial professionals deeper insight into China＊s money and capital markets. Three of the eight indicators求the Renminbi Pressure Indicator, the Chinese IPO Indicator, and the Market Adjusted Debt Indicator求were launched in November 2006. A Banking Strength Indicator and Adjusted Trade and Finance Indicator were launched in April 2007. The remaining indicators will be launched later this year.
Time Period Coverage and Frequency
The indicator covers the period from November 30, 1980, through March 2007. Data are available from the Milken Institute upon request. There will be a two- to four-month delay in reporting values for the indicator, depending on the release of information from authorities in China.
Sources of Data
The data used in the construction of the indicator are obtained from the International Monetary Fund, People＊s Bank of China, and State Administration of Foreign Exchange.
To view additional information, visit http://www.xinhuafinance.com/indicators and http://www.milkeninstitute.org/chinaindicators.
About Xinhua Finance Limited
Xinhua Finance Limited is China＊s premier financial information and media service provider and is listed on the Mothers Board of the Tokyo Stock Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China＊s financial markets and the world, Xinhua Finance serves financial institutions, corporations and re-distributors through five focused and complementary service lines: Indices, Ratings, Financial News, Investor Relations, and Distribution. Founded in November 1999, the Company is headquartered in Shanghai with offices and news bureaus spanning 11 countries worldwide. For more information, please visit http://www.xinhuafinance.com .
About the Milken Institute
The Milken Institute is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. The Milken Institute has extensive expertise in China and conducts ongoing research on China＊s banking and capital markets. It is based in Santa Monica, Calif. For more information, please visit http://www.milkeninstitute.org .
For more information, please contact:
Xinhua Finance
China
Ms. Joy Tsang,
Tel: +8621-6113-5999, +852-948-64363
Email: joy.tsang@xinhuafinance.com
Japan
Mr. Jiong Sun
Tel: +81-3-3221-9500
Email: jsun@xinhuafinance.com
Taylor Rafferty (Media contact for Xinhua Finance)
Japan
Mr. James Hawrylak
Tel: +81-3-5733-2621
Email: James.hawrylak@taylor-rafferty.com
United States
Mr. John Dudzinsky
Tel: +1-212-889-4350
Email: John.Dudzinsky@taylor-rafferty.com
Europe
Faisal Kanth
Tel: +44-20-7614-2900
Email: Faisal.Kanth@taylor-rafferty.co.uk
Milken Institute
Ms. Jennifer Manfr豕, Associate Director of Communications
Tel: +1-310-570-4623
Email: jmanfre@milkeninstitute.org
