China’s Central Bank, PBoC, issued a statement in its website regarding Governor Yi Gang’s response to China Securities Journal regarding recent decline in the Yuan.
Yi acknowledged the fluctuation in the exchange rate and said the central bank is “pay closing attention”. He attributed to the decline of Chinese Yuan to strength of the US Dollar, external uncertainties and some procyclical behaviors.
He also noted that the “managed floating exchange rate system” is based on market supply and demand. And “practice over the years has proven that this system must be effective and must be adhered to”.
At the same time, China is committed to deepen the reform of exchange rate marketization and use sufficient policy tools to ” maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.”
Suggested reading, our report Has China Given Green light to Renminbi Selloff?