China to Prioritize Yuan Long-term Stability: Daily Cites PBOC Governor

China will prioritize the stability of its currency and pursue market-based interest rate reforms to improve policy transmission and ensure capital reaches the real economy, the Securities Daily reported citing an article by Governor Yi Gang of the PBOC. China needs to establish an independent central bank financial budget management system to maintain a firewall between finance and the central bank to avoid the monetization of the fiscal deficit, wrote Yi. It was important to prevent corporate credit risks being carried onto the central bank's books, which may affect the yuan's credit standing, Yi wrote. He said the PBOC will strengthen and integrate the macro-prudential management of major financial activities, markets, institutions and infrastructure.