Weaker Yuan Unlikely To Constrain Monetary Policy: Daily

A recent yuan correction has not placed constraints on China’s monetary policy options, as the People’s Bank of China will prioritise stabile economic growth and the real economy, the Economic Daily reported citing analysts. A yuan depreciation largely against the U.S. dollar has not been the case against a basket of foreign currencies, indicating the competitiveness of China’s exports and the resilience of the balance of payments, the newspaper said citing Feng Xuming, researcher at Chinese Academy of Social Sciences. The PBOC should consider lowering policy interest rates to lower the real economy’s existing debt burden and financing costs, as quantitative monetary policy tools prove ineffective amid weak borrowing demand by companies, the newspaper cited Feng as saying.