MNI Brief: Yuan Exchange Rate Is Stable - PBOC Deputy Governor

The Chinese yuan exchange rate is “generally stable” thanks to sound monetary policy, said People's Bank of China Deputy Governor Pan Gongsheng at a Party Congress press conference on Thursday.

China is one of few countries to have pursued “normal monetary policy” in past years and this has led to stability in prices, employment, the exchange rate, and balance of payments, said Pan, who is also a director of the State Administration of Foreign Exchange. He said the PBOC will “continue to take counter-cyclical and pro-cyclical measures to maintain stability in the economy”.

Pan said financial risk management was a “central task” for the PBOC to keep the economy on a solid footing. The bank would continue making “market oriented reforms in a modest manner”.

The yuan has grown as an international currency, becoming the third largest currency in the International Monetary Fund's Special Drawing Rights (SDR) and more countries are holding yuan as a reserve currency, Pan said.

USD/CNH dipped briefly today following unconfirmed reports China is debating a reduction in quarantine times for inbound travelers. (See FOREX : Risk-Off Pattern Holds Despite Incremental Relief From Report On China Border Rules Debate)

The role of state-owned enterprises will be strengthened in the rare earths and minerals sector, and will play an important role in the Belt and Road Initiative, Qian Zhimin, Chairman of State Power and Investment Corporation said at the same press conference.