China c.banker says Aussie serves as yuan proxy-media

BEIJING, Sept 18 - A Chinese central bank official acknowledged on Friday that the Australian dollar serves as a proxy for the yuan and tends to strengthen on bullish news about the Chinese economy, Market News International reported. "The currencies of some countries move with commodities prices, (such as) Australia and Brazil," MNI quoted Zheng Hong, director of the exchange rate section within the monetary policy department of the People's Bank of China (PBOC), as saying.

"The Australian dollar is a shadow currency of the yuan. When the Chinese economy is good, iron ore demand is strong and the Australian dollar appreciates," it quoted Zheng as saying.

It was the first time a PBOC official has made such an explicit acknowledgement of that linkage.

The yuan has remained at around 6.83 per U.S. dollar since the middle last year, as the central bank put a process of gradual appreciation on hold following the onset of the global financial crisis.