June 8 (Reuters) - Now is the right time for China to reform its exchange rate regime, a Chinese government economist said in comments published on Tuesday.
Fan Jianjun, a financial researcher with the Development Research Centre, a think-tank under the State Council, or cabinet, told the China Economic Times that the central bank should halt its currency intervention and let market forces decide the yuan's rate.
Fan represents a minority view.
Few other advocates of greater yuan flexibility in government and research circles argue that the People's Bank of China should simply stand aside and allow supply and demand to drive the yuan.
The goal of China's currency reform should be to develop a market-based exchange rate so that the PBOC, once freed of the responsibility of controlling the exchange rate, can concentrate on monetary policy and economic stability, Fan said.
At present, the central bank permits the yuan to move up or down 0.5 percent a day against the dollar from a central parity it sets every morning. Through its interventions to prevent the yuan from rising, the PBOC has accumulated $2.45 trillion in currency reserves, the world's largest stockpile.
Fan said pressure on the yuan to appreciate against the dollar has weakened significantly over the past weeks; the Chinese currency's rate was now close to a balanced level.
Pushing forward exchange rate reform now will not lead to a sharp appreciation in the yuan, and it will not have a significant impact on the real economy, Fan said in question-and-answer interview in the newspaper, which is published by his think-tank. (Reporting by Zhou Xin and Alan Wheatley; Editing by Ken Wills)