MNI: China New PBOC Head: To Continue Prudent Monetary Policy

     BEIJING (MNI) - The most important task for the People's Bank of China is

to implement prudent monetary policy well, the new head of the central bank told

reporters on the sidelines of the meeting of National People's Congress Monday.

     Yi Gang, who was appointed governor of the PBOC earlier, said China also

needs to advance reform and the opening of its financial sector, as well as

maintain financial stability.

     His comments are in line with current central bank policies, indicating

continuity of the bank's monetary policy and financial regulation under the new

regime, as expected by financial markets.

     He said China will take measures to further reform and open the financial

sector, without giving specifics. But he told reporters more detailed policies

and actions will be announced at the coming Boao Forum for Asia in Hainan

Province, expected in early April.

     The National People's Congress officially voted Yi in as new central bank

head Monday, confirming overnight media reports.

     Under the leadership of Yi, the PBOC, dependent on the Communist Party

support, will be largely influenced by Liu He, the newly assigned vice premier

leading the economic development of the world's second largest economy. However,

as the head of a central bank which is increasingly powerful both at home and

internationally, Yi will likely exert substantial influence on the global

financial markets.

     --ZHOU PROTEGE

     Educated in the U.S. with a MBA from Hamline University in Minnesota and a

PhD. in economics from the University of Illinois, the protege of the

long-serving PBOC governor Zhou Xiaochuan is regarded as a pro-market economist.

     Back on Mar 9, Yi told a press conference on the sidelines of the NPC that

China's monetary policy should be based mainly on the domestic economy and

financial institutions.

     Yi, a 21-year PBOC veteran, will face a more complex domestic economic

landscape, with challenges including guarding China from potential risks of

capital outflow, curbing surging credit growth while maintaining stability of

economic growth, and further advancing the internationalization of the yuan.

While internationally, countering impacts of interest rate hikes by the Federal

Reserve and increasing trade conflicts with the U.S. will also be in Yi's inbox.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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