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A view of the headquarters of People's Bank of China, the central bank of China, January 11, 2025. /CFP
China will keep the yuan's exchange rate stable and at a reasonable and balanced level, the country's financial regulators have said at a recent meeting.
The People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) will take comprehensive measures to stabilize expectations, enhance resilience and strengthen management of the foreign exchange market, according to the China Foreign Exchange Committee.
The committee is a mechanism comprising regulators from the PBOC and SAFE as well as industry participants to provide guidance on the foreign exchange market.
Efforts will be made to rectify pro-cyclical market behaviors, address actions that disrupt market order and guard against the risk of the exchange rate overshooting, the committee said.
"China has the confidence, conditions and ability to maintain stable operation of the foreign exchange market," said PBOC Governor Pan Gongsheng at the 18th Asian Financial Forum in Hong Kong on Monday.
China expands cross-border financing
Meanwhile, building on other efforts to stabilize the yuan, China has also raised a key parameter in its macro-prudential management to expand cross-border funding sources for companies and financial institutions.
The macro-prudential adjustment parameter, a multiplier that decides the upper limit of outstanding cross-border financing, has been revised from 1.5 to 1.75, according to a joint statement by the PBOC and SAFE on Monday.
Regulators last raised the parameter in July 2023.
This move aims to improve macro-prudential management and guide enterprises and financial institutions to optimize their asset-liability structure, the statement added.
(With input from Xinhua)