But economists warn that allowing its currency to appreciate against the dollar could lead to other problems in China.

The big worry now is that Japan will also allow its currency to devalue, responding to what has happened in Korea.

Europe's monetary system was swept by a new wave of uncertainty today after Sweden decided on Thursday to allow its currency to fall in value.

Under pressure from American officials, South Korea has allowed its currency, the won, to appreciate slightly against the dollar so far this year.

But it would not center on forcing China to allow its currency to float.

China has allowed its currency to appreciate modestly against the dollar.

China allowed its currency to appreciate to 8.11 to the dollar from 8.277, the level it had maintained for nearly eight years.

Last year, it allowed its currency to appreciate modestly, and promised to gradually allow more gains, though those have been small so far.

The Germans will never allow their currency to fail.

After giving up and allowing its currency to float in value, the Government pushed the interest rate back down to 12.5 percent.