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MNI POLICY: China Should Keep Market-based FX: PBOC Research

MNI (Sydney)

China's central bank should maintain the market-based yuan exchange rate formation and optimise financial resource allocation to enhance FX rate flexibility and allow fluctuations at stable levels, according to a research report by researchers of the monetary policy department of the People's Bank of China on Thursday.

China should continue to increase the reflexibility of exchange rates to cushion external instabilities and uncertainties, the researchers said. It is important to keep yuan policies autonomous, and to focus on the domestic circulation.

China should refrain from normalised interventions in the FX market and focus on steering expectations to avoid herding effects, the report read.

The report affirmed a managed exchange rate regime, referenced on the currency basket and movements based on market demand and supply.

MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com
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MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com
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