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MNI INTERVIEW: China Must Lift Growth To Curb Capital Outflow

MNI (Singapore)
(MNI) Beijing

The PBOC is right to conduct an exchange rate policy of "benign neglect" and not set a "red line" for the yuan, said former PBOC adviser Yu Yongding.

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Striking the right balance between pro-growth policies and Beijing’s Covid-Zero strategy will be crucial in delivering a recovery to restore confidence in China’s economy, curb capital outflows and support the yuan, former People’s Bank of China monetary policy committee member Yu Yongding told MNI.

Despite the yuan’s slide to a 15-year low against the U.S. dollar amid concerns about China’s outlook, the government still should allow the currency to be as flexible as possible and focus its efforts on reviving growth that will fall short of Beijing’s target of around 5.5% in 2022, said Yu.

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Striking the right balance between pro-growth policies and Beijing’s Covid-Zero strategy will be crucial in delivering a recovery to restore confidence in China’s economy, curb capital outflows and support the yuan, former People’s Bank of China monetary policy committee member Yu Yongding told MNI.

Despite the yuan’s slide to a 15-year low against the U.S. dollar amid concerns about China’s outlook, the government still should allow the currency to be as flexible as possible and focus its efforts on reviving growth that will fall short of Beijing’s target of around 5.5% in 2022, said Yu.

Keep reading...Show less