Flash Comment - China: Move on exchange rate is imminent

It appears that the Peoples Bank of China and the financial community has won theinternal debate in China and a decision to resume appreciation at some stage has probablyalready been made by the Government. We think the Chinese leadership is currentlycommunicating its attention to the US administration

While our main scenario remains that appreciation will be resumed just before the China-US summit in late May, our main message is that it could happen anytime now. In themarket there is increasing speculation it could happen within days, before president Huarrives in Washington to participate in the Nuclear Security Summit.