The No. 2 official in China’s central bank said continued growth in the country’s economy would stabilize its currency and allow the People’s Bank of China to let it move according to market forces.
A hands-off approach could cause more depreciation in the renminbi should the Chinese economy weaken further, The Wall Street Journal said in a report.
But Yi Gang, the PBoC’s deputy governor, said such “fundamentals” as China’s strong trade surplus would ensure the strength of the renminbi, the report said.
Chinese officials have said they have allowed the currency to slide to link it to the global market and not to boost exports and help the economy.
“I think the overall direction for the renminbi exchange rate regime will continue to move toward a more market-oriented regime and let basically the demand and the supply determine the rate,” Yi was quoted as saying at the International Monetary Fund’s annual meeting.
China’s still-healthy growth rate “suggests that the renminbi will be more or less stable at a rate more or less close to its equilibrium level”, he said.
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