China confident of keeping yuan stable
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E-mail Xinhua, August 6, 2019
Capable of keeping yuan stable
"The PBOC has the experience, confidence and capability necessary to keep the yuan's exchange rate basically stable at a reasonable and balanced level," the statement said.
The yuan's exchange rate is determined by long-term economic fundamentals, although it is affected by the market supply and demand as well as the dollar's movement in the short term.
From the macro perspective, the yuan's exchange rate is buoyed by the country's sound fundamentals, strong economic resilience, stable fiscal position, controllable financial risks, balanced cross-border capital movement and sufficient foreign exchange reserves.
The central bank said China is likely to become a hot spot for global capital, as the country is the only major economy that keeps normal monetary policy while many developed economies have loosened their monetary policies.
The central bank has accumulated considerable experience and policy tools in coping with exchange rate fluctuations and will continue to innovate and improve its toolkit, crack down on short-term speculation and stabilize market expectations in the future, according to the statement.
China will be committed to the promises on exchange rates made at all G20 summits and abide by a market-determined exchange rate system, said the PBOC governor Yi Gang in a statement on the PBOC website.
Refusing competitive devaluation, the country will not resort to exchange rates in handling external uncertainties such as trade disputes, Yi said.
Looking ahead, Yi stressed the central bank, together with the State Administration of Foreign Exchange, would maintain stability and continuity of the country's foreign exchange management policy and safeguard market entities' legitimate and reasonable demands for using foreign currencies.
More efforts will be made to deepen the reform and opening up in the field of foreign exchange, promote the liberalization and facilitation of cross-border trade and investment and better serve the real economy and the country's comprehensive opening up, Yi pledged.
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