Yuan Supported Long-term as China Keeps Rates Positive: Advisor

The Chinese yuan may continue to stay strong as China keeps its normal monetary policy, including policy rates that increase the interest rate spreads against other countries which are maintaining negative or zero rates, said Li Yang, the head of National Institute for Finance and Development, a state-owned think tank. In a speech transcript carried by Sina.com, Li said that China was likely to see an increase in the flow of global capital entering its bond and stock markets. Chinese interest rates may trend lower in the years to come, narrowing the net interest margins of commercial banks. China should be more selective about inbound capital, and should require good environmental and credit standards, Li said.