bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Wendy Wu

China would “never” launch a currency war to devalue the yuan to boost exports, a senior Chinese central bank official said on Saturday, cementing Beijing’s vow to keep a stable yuan.
Yi Gang, vice-governor of the People’s Bank of China (PBOC), made the comments to mainland media on the sidelines of the Chinese People’s Political Consultative Conference in Beijing on Saturday.
“We will never devalue [the yuan] to promote exports, will never stage a currency war, as China is a responsible country. Our overall direction is to keep exchange rate basically stable within a reasonable range,” Yi said.
He also said in the morning that there was no need at present for the PBOC to follow the US Federal Reserve in tightening monetary policy by raising interest rates.
China’s leaders still banking on ‘irreplaceable’ central bank chief
Any decision on interest rates would take into account such domestic factors as economic growth and prices, he added.
“I think we should continue to observe [our economic performance],” he told the China Business News.

Expectations of a second rate hike by the Federal Reserve later this month have risen in recent weeks after Fed chair Janet Yellen said in mid-February that it was unwise to wait too long to raise interest rates.
On Friday, Yellen said that a rise at the Fed’s next meeting on March 14 and 15 may be “appropriate”.
The paces of the Fed’s rate rise could cloud the outlook of the yuan’s exchange rate and capital outflows. Zhang Yu, an analyst at Minsheng Securities, said the yuan would face depreciation pressure, expecting it to fluctuate in a range of 6.8-7.2 against the dollar.
Fed chief Yellen says March rate hike by US may be ‘appropriate’
China’s economy is expected to have seen a good start to the year and the PBOC has raised interest rates of key tools it routinely uses to tighten market liquidity, fueling expectations that monetary policy is tightening.
But so far it has refrained from adjusting benchmark interest rates or banks’ deposit reserve ratios due to its caution against sending strong signals on policy shifts that might disturb the yuan and capital flows. The PBOC is also alert to domestic financial risks.

Yi said market liquidity was normal and stable despite the continuing capital outflow. He denied it was necessary to cut banks’ deposit reserve ratios, which might unlock funds into the interbank market. The central bank must keep monetary policy on an even keel – “not loose and not tight”, he added.
Be afraid, be very afraid as US readies to raise interest rates
Such a stance would maintain sound economic growth and prevent inflation and an asset bubble, he said, adding that the 2-3 per cent rise of the Consumer Price Index was regarded as a “golden range” and central banks around the world set their CPI targets at around 2 per cent.
“China’s CPI [target] this year will be close to the golden range,” Yi said.
He also said effective measures should be taken to ward off various risks and retire overcapacity.


CY Leung exhorts Hong Kong’s advisers to Beijing to strengthen society’s love for China and safeguard national security

Decoding China’s policy intent: how liberalisation happens behind the veil of conservative official statements

China adds national pledge to curb housing prices in government work report

China’s ‘two sessions’ delivers core message on Xi Jinping’s central role

China's Two Sessions 2017

China would ‘never’ launch currency war, says central bank vice-governor

People's Bank of China Deputy Governor Yi Gang at the World Bank Group Headquarters in Washington late last year. Photo: EPA

FILE PHOTO: A Chinese national flag flutters outside the headquarters of the People's Bank of China, the Chinese central bank, in Beijing, China April 3, 2014. REUTERS/Petar Kujundzic/File Photo

Federal Reserve Chair Janet Yellen delivers semiannual monetary policy testimony during a House Financial Services Committee hearing on Capitol Hill in Washington, U.S., February 15, 2017. REUTERS/Yuri Gripas

News

China

Economy

China Economy

Yi Gang says yuan is stable and no current need to follow US Fed in raising interest rates


China's Two Sessions 2017: Business & Economy