The Chinese central bank and China’s top foreign exchange authority have publicly committed to maintaining the stability of forex markets and the yuan exchange rate.
“We fully possess the foundations, the confidence and the ability to maintain the stable operation of China’s forex markets, and keep the renminbi exchange rate fundamentally stable at a rational, balanced level,” said Pan Gongsheng (潘功胜), vice-chair of the People’s Bank of China (PBOC) and head of the State Administration of Foreign Exchange (SAFE) on 19 May.
Pan said that since the start of the year PBOC had strengthened counter-cyclical adjustments, strengthened policy foresight and flexibility, maintained rationally ample liquidity, expedited rapid growth in social credit and appropriately loosened monetary and financial conditions, with China’s finance sector further expanding its support for private enterprise and micro and small enterprises.
At the end of April the broad M2 money supply saw YoY growth of 8.5%, for an acceleration of 0.2 percentage points compared to the same period last year.
“The stable operation of China’s economy and financial sector provides vigorous basic support to maintaining the rational stability of forex markets and renminbi exchange rates…since the start of the year China’s forex market has operated stably, foreign capital inflows have increased, and forex reserves have risen amidst stability.”