(Yicai Global) June 20 -- China's stock markets have rallied today after Yi Gang, governor of the People's Bank of China, assured investors that plummeting exchange indexes were a result of human emotion.
The Shanghai Composite Index was up 0.51 percent at 2,922.62 as of 1.50 p.m. today, after the PBOC chief told investors to keep their heads and think rationally via an exclusive interview with Shanghai Securities Times yesterday. The Shenzhen Component Index was up 1.37 percent at 9,543.6 as of the same time.
The benchmarks slumped yesterday, with the Shanghai index diving 3.8 percent to a near two-year low and the Shenzhen benchmark diving 5.3 percent. The Growth Enterprise Market in Hong Kong also plunged nearly 5.8 percent.
Yi sought to calm unnerved investors after United States President Donald Trump threatened to add a 10 percent import tariff on a list of USD200 billion worth of Chinese goods just hours earlier. The new measures come on top of a 25 percent tax on USD50 billion of Chinese imports announced on June 15.
China has good economic fundamentals, resilient economic growth and balanced supply and demand, Yi added, saying the yuan has been one of few currencies which have appreciated against the dollar this year and that the Chinese capital market is set for healthy development.
"We will proactively make relevant policies, comprehensively use various monetary policy tools, maintain a reasonable and stable liquidity, grasp the strength and tempo of structural deleveraging, promote steady economic health, and prevent systemic financial risks," he said.
Editor: James Boynton