China's currency may be given free reign

China's currency may be allowed to fluctuate with the foreign exchange markets following the release of new data.

The country's government had previously held exchange rates at an artificial low against the US dollar in a bid to ease pressures on China's exporters.

However, recent reports of significant growth in the Asian giant's export sector may see this reversed.

Export from China rose by 45.7 per cent between February 2009 and the same month in 2010.

Economist Liu Oiyuan, told the Associated Press: "Stronger domestic demand led to the good performance of imports. We can see the domestic economy is on track for recovery."

Even marginal adjustments to China's currency can have knock-on effects on the surrounding Asian countries.

This is partly due to it having the world's largest foreign exchange reserves.

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Posted by Chris Barber