Date
23 March 2017
China will continue to reform its exchange rate regime after significant achievements in the past decade, says Joseph Yam. Photo: HKEJ
China will continue to reform its exchange rate regime after significant achievements in the past decade, says Joseph Yam. Photo: HKEJ

RMB reform to continue despite stock market volatility: Yam

China will continue its currency exchange rate reform, with the moves likely to be more closely aligned to market forces, according to Joseph Yam Chi-kong, former chief executive of the Hong Kong Monetary Authority.

Many capital account items have already been liberalized since the start of the currency reform, Yam noted, according to the Hong Kong Economic Journal.

Authorities will weigh the risks and benefits before launching new initiatives, he was quoted as saying in an interview.

The comments came as China prepares to mark the 10th anniversary of the launch of its currency reform.

On July 21, 2005, Chinese authorities began allowing the renminbi exchange rate to move in reference to a basket of foreign currencies, ending a peg to the US dollar.

Yam believes the currency reform will continue despite the recent stock market rout in China.

In other comments, he said he expects the renminbi to be included in the Special Drawing Rights basket of the International Monetary Fund.

China has more bargaining power now due to its status as the world’s second largest economy, Yam said, adding that the renminbi’s inclusion in the IMF reserve assets is merely a matter of time.

[Chinese version中文版]

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