MNI POLICY: PBOC to Push Open Market and Reform Forex: Off'l

     BEIJING (MNI) - The People's Bank of China (PBOC) will push for the further

opening of the financial sector and a raft of policies to facilitate foreign

investment, according to a deputy governor from the central bank.

     Speaking on Saturday at the 2019-2020 Annual Meeting on the Chinese Economy

held by the China Center for International Economic Exchanges, deputy PBOC

governor Chen Yulu said the bank planned to improve capital account

convertibility and reform the exchange rate mechanism to minimize risk while

also stabilizing market expectations and facilitating foreign investment.

     Here are some key takeaways from Chen's speech:

     - Capital account convertibility will help stabilize market expectations

and draw foreign investment. A market-oriented exchange rate formation mechanism

can reduce risks and effectively allocate resources. In the process of opening

up its financial sector, China will take steps to push relative reforms.

     - Opening up should match regulatory capacity to prevent risks. China will

enhance macro-prudential management (MPA) and strengthen facilities serving

payment, depository and settlement while accelerating the growth of both onshore

and offshore markets.

     - China will coordinate with other countries in monitoring cross-border

capital flow to prevent large capital movements that may trigger systemic risks.

     - The PBOC will continue to build up the macro-prudential policy framework

targeting forex, property and bond markets. The central bank has enhanced its

macro-prudential policy since 2009 by introducing differential reserve

requirement ratio for different market participants and MPA.

     - The PBOC will continue to implement a prudent policy and maintain a

healthy general leverage ratio in the financial system to support "high-quality

development." 

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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