MNI BRIEF: PBOC Pledges to Curb Any Overshoot Of The Yuan: MPC

The People’s Bank of China will take measures to prevent any overshooting of the yuan exchange rate and correct “pro-cyclical behavior” in the market, the central bank said following the latest Monetary Policy Committee meeting on Friday.

Comprehensive measures will be implemented to curb one-way trading expectations, guarding against "the risk of the yuan exchange rate overshooting,” a statement in the PBOC’s website noted. (see:MNI: China Yuan Seen Breaching 7.3, Strengthening Against Basket)

ThePBOCwill ensure the resilience of current targeted relending tools to support sectors key to economic growth.The existing structural monetary policy tools, such as the newly-established relending for technological innovation, technological transformation, and affordable housing, will be effectively launched, the MPC pointed out, noting the Bank will increase financial support for the commercial and affordable housing supply system and promote the accelerated establishment of a new model for real estate development.

Efforts will be made to carry out the already introduced monetary policies and maintain ample liquidity, guide reasonable credit growth, and promote moderate price increases. At the same time, the Bank will push a gradual decline in the cost of corporate financing and household credit, the statement said, stressing the central bank will continue to monitor changes in long-term yields during the economic recovery. (see:MNI: PBOC Eyes CGB Selling To Curb Bull Bond Market)