China Should Stay Calm About Devaluation Pressure as Yuan is Globalized, PBOC Vice Governor Says

Yicai

2017-03-28

(Yicai Global) March 28 -- The yuan’s internationalization is a long-term undertaking, and China needs to keep a ‘calm mind’ and achieve the goal step by step, Yi Gang, a vice governor of PBOC, said recently.

The steady economic development trend in China and driving forces behind the yuan’s globalization have remained unchanged, and these provide the most important basis for continued internationalization of the Chinese currency, he said at the annual cross-border yuan transaction analysis conference.

Efforts must be made to ensure effective policymaking at the top level, facilitate trade, investment and payment transactions, and facilitate the transformation of the yuan as a global reserve currency, Yi said. China must steadily push forward capital account convertibility and the development of relevant infrastructure facilities for the yuan’s internationalization, guide the development of offshore markets and improve relevant supervisory and regulatory measures, he said.

The PBOC will further enhance the existing policy framework and infrastructure to promote the use of the yuan across national borders and standardize transnational yuan transactions while placing equal emphasis on reforms and risk prevention, per decisions made at this year’s meeting.

It will deepen the exchange rate formation mechanism reform, achieve convertibility of capital accounts, further improve the yuan’s functions as an investment reserve currency and in financial transactions, and push ahead with domestic market deregulation efforts.

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