Ex-PBoC Off'l: China Should Monitor Inflows, Rapid CNY App'n (RTRS)

{CH} China's exchange rate regime does not need to be fundamentally changed, but the country should closely monitor large short-term capital inflows and the risk of a rapid yuan appreciation, a former central bank official told a wealth management forum. Large short-term capital inflows could raise imported inflationary pressures and push up domestic asset prices, said Sheng Songcheng, former head of the statistics department at the People's Bank of China (PBOC). The yuan has risen more than 6% from lows against the dollar in late May as the economy recovered from the fallout of the coronavirus pandemic, while official data showed foreign holdings of Chinese bonds jumping 28% in the first eight months of 2020, as investors were lured by attractive yield premiums.

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