27 Oct 2015
‘We need a more flexible exchange rate’ – PBOC Adviser Huang
FXStreet (Mumbai) - The Chinese central bank (PBOC) adviser Huang Yiping crossed the wires via Reuters, noting that the Chinese authorities should continue to allow more flexible currency market regime and not go back to old way of the PBOC setting the Yuan’s exchange rate.
Key Quotes:
"Looking back, the timing of the PBOC August exchange rate reform was a bit of a problem...The relaxation of central parity encouraged investors with a pessimistic view on China, resulting in a sharp depreciation of the yuan."
"It's understandable for the PBOC to step up exchange rate management to maintain basic stability in the yuan exchange rate,"
"But in the long run, we need a more flexible exchange rate. We can't go back to the old way of letting administrative authorities set the market exchange rate...Managing the exchange rate cannot continue... There is no problem with having a more flexible exchange rate."
On China’s economic outlook, Huang stated, "I believe current economic growth is OK. There is no urgency for policies to lift growth but we can use some monetary and fiscal measures to stabilize growth."
Key Quotes:
"Looking back, the timing of the PBOC August exchange rate reform was a bit of a problem...The relaxation of central parity encouraged investors with a pessimistic view on China, resulting in a sharp depreciation of the yuan."
"It's understandable for the PBOC to step up exchange rate management to maintain basic stability in the yuan exchange rate,"
"But in the long run, we need a more flexible exchange rate. We can't go back to the old way of letting administrative authorities set the market exchange rate...Managing the exchange rate cannot continue... There is no problem with having a more flexible exchange rate."
On China’s economic outlook, Huang stated, "I believe current economic growth is OK. There is no urgency for policies to lift growth but we can use some monetary and fiscal measures to stabilize growth."