Resolutely preventing overshooting risk of the exchange rate, Pan Gongsheng responds to RMB's recent depreciation
On Jan. 13, Pan Gongsheng, Governor of the People's Bank of China (PBC), explained the recent depreciation of Renminbi (RMB) at the 18th Asian Financial Forum. He said that recently, the US dollar index stood high, non-US currencies generally depreciated, and the RMB depreciated against the US dollar, but overall showed stronger resilience.
"After years of continuous efforts, China's foreign exchange market has made great progress, market participants have become more mature, and trading behavior has become more rational. At present, the share of RMB cross-border balance of trade in goods has reached 30%, which reduces the exposure of enterprises to exchange rate risks, and the State Administration of Foreign Exchange of the PBC, as the regulator of the foreign exchange market, has become more comfortable and experienced in facing changes in the market," Pan said.
Pan emphasized that we have the confidence, conditions and ability to maintain the stable operation of the foreign exchange market.
"We will insist on the decisive role of the market in the formation of the exchange rate, give effective play to the function of the exchange rate as an automatic stabilizer of the macro-economy and the balance of payments, and at the same time, resolutely rectify pro-cyclical behaviors in the market, resolutely handle behaviors disrupting the order of the market, and resolutely guard against the risk of overshooting of the exchange rate, so as to maintain the basic stability of RMB exchange rate at a reasonable equilibrium level and keep it at a reasonable equilibrium level," he said.
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