Argentine media Tuesday focused on China's recent exchange rate adjustment and cuts in reserve requirement ratio and interest rates, saying that those measures would help China tackle complex domestic and global economic changes.
In an editorial published in the daily La Nacion, Raul Ochoa, a professor at the University of Buenos Aires, said the move to adjust the exchange rate was motivated by the "determined attitude to transform the yuan as soon as possible into a currency of global reach."
"To do that it was, and is, essential to gradually open up the movement of capitals ... and slowly loosen controls on the exchange market to achieve a new level of equilibrium," Ochoa said.
The measures being put in place by China, he explained, include bringing the yuan's onshore and offshore exchange rates closer together until a single rate is in effect in both the Chinese mainland and Hong Kong; and reaching an accord with the International Monetary Fund (IMF) to include the yuan in the so-called Special Drawing Rights (SDR), a basket of world's major currencies (U.S. dollar, euro, British pound, Japanese yen) that serve as supplementary foreign exchange reserves.
"The fast pace of these decisions has to do with speeding up China's transformation into a global player -- not the 'world's factory' anymore -- and making progress toward new frontiers in technology, knowledge and management," Ochoa said.
China's internal transition to a consumer-driven economy "is turning out to be very complicated and requires that (the country) amply position itself on the global stage in order to sustain it," the expert said.
The editorial coincided with an announcement Tuesday from the People's Bank of China (PBOC), the country's central bank, that it was cutting the reserve requirement ratio (RRR, required level of cash reserves at banks) and key interest rates "to promote restructuring" and "stabilize the real economy."
On Sept. 6, the RRR for financial institutions will be cut by 50 basis points. From Wednesday, interest rates for one-year lending and deposits will be cut by 25 basis points to 4.6 percent and 1.75 percent respectively.
This marks the fourth time in nearly seven months the bank has cut the RRR, and the fifth time it has cut interest rates in almost nine months.
China needs more flexible monetary policies to tackle complex internal economic changes and an external global economy that is contracting, the central bank said.
Two other Argentine dailies, the Cronista Comercial and Clarin, expressed concerns that fluctuations in China's stock market would affect the Argentine economy.
However, Luis Palma Cane said these concerns were ill-founded.
In a radio interview, Palma said "without a doubt, all the global instability has repercussions on Argentina, but to believe that the instability of Argentina's financial market, basically its exchange market, is caused by China, is mistaken."
"Argentina's imbalances are 90 percent due to national economic policy," Palma said.
Still, China will continue to dominate the headlines, said Sabrina Corujo, an analyst at consulting firm Portfolio Personal.
"This week, the spotlight will continue to focus on China and emerging countries in general," she said.
