Date
24 March 2017
Zhou Xiaochuan says China has no plans to tighten capital controls and that there is no need to worry about a short-term decline in foreign exchange reserves. Photo: Xinhua
Zhou Xiaochuan says China has no plans to tighten capital controls and that there is no need to worry about a short-term decline in foreign exchange reserves. Photo: Xinhua

PBoC chief breaks silence to support renminbi

China’s central bank chief has broken his long silence to say there’s  no basis for continued yuan depreciation.

People’s Bank of China (PBoC) governor Zhou Xiaochuan is stepping up efforts to restore stability to the nation’s currency and economy, Bloomberg reports.

China’s balance of payments is good, capital outflows are normal and the exchange rate is basically stable against a basket of currencies, Zhou said in an interview published Saturday in Caixin magazine.

In recent months, such comments have been left to deputies and the central bank research department’s chief economist.

Zhou dismissed speculation China plans to tighten capital controls and said there’s no need to worry about a short-term decline in foreign exchange reserves.

The country has ample holdings for payments and to defend stability, he said.

Zhou accused “speculative forces” of targeting the yuan, according to BBC News.

He said China would never allow international speculators dominate market sentiment.

The Chinese economy grew 6.9 percent in 2015, its slowest rate since 1990.

Fears of an economic slowdown have caused some investors to move their money out of China in search of better returns elsewhere.

However, Zhou said China would not tighten its capital controls as a result.

“Capital outflow and capital flight are two different concepts,” he said.

– Contact us at [email protected]

CG/RA

EJI Weekly Newsletter

Please click here to unsubscribe