Banking

China's foreign exchange regulator Wednesday pledged to continue efforts to manage illegal capital inflows in the second half of the year.

In a statement on its website, the State Administration of Foreign Exchange (SAFE) said it had investigated up to 3.5 million cases of international trade transactions, involving a total of $440 billion, during its hot money monitoring campaign, which began in February.

The ultimate goal of China's exchange rate reform is to make the yuan a fully convertible currency, Yi Gang, head of the State Administration of Foreign Exchange (SAFE), said Friday. Yi, also deputy governor of the People's Bank of China, the central bank, made the remarks in an interview with Caixin media's China Reform magazine, which is posted on the SAFE website.

"There is no official timetable for a convertible yuan," he said in the interview with the magazine's executive editor Hu Shuli.

The Chinese currency, or the RMB, still shoulders the pressure of appreciation albeit the pressure has eased, as the value of the currency drew close to the equilibrium level after adjustments in the past decade, Yi said.

China will not bow to pressure from the outside world on revaluing the Renminbi and any changes in the nation's foreign exchange will be made on China's own terms, Chinese officials heading to the G20 summit in Toronto said at a press briefing.

The remarks come on the heels of US senators sending proposals to the Obama administration last Thursday calling for fresh pressure on China to allow more flexibility of its currency and a large-scale appreciation, despite the Chinese government's announcement on its foreign exchange reform last weekend.

China's yuan surged on Friday to its highest level in the past five years, with the central bank setting the reference central parity rate at 6.7896 against the dollar, already more than half a percentage point higher within a week.

However, US President Barack Obama claimed on Thursday it was too soon to tell whether China's latest yuan policy change would be sufficient.

China said on June 19 that it would make the yuan more flexible, which Obama described as a "positive" move. China has made progress with the announcement that it was returning to its phased-in, market-based approach, he said at a joint press conference with Russian President Dmitry Medvedev.