China’s financial regulators are taking new steps to keep the yuan, their national currency, stable and support the economy. This means they want to make sure the value of the yuan doesn’t swing wildly compared to other currencies, which can affect prices and trading.
The People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) announced plans to keep the yuan at a reasonable level. They aim to help people and businesses have confidence in the economy by stabilizing expectations and managing the foreign exchange market better.
“China has the confidence, conditions, and ability to maintain stable operation of the foreign exchange market,” said Pan Gongsheng, Governor of the PBOC, at a big financial forum in Hong Kong on Monday.
They also want to stop market behaviors that could cause problems, like panic buying or selling of currency, which can mess up market order. By doing this, they hope to prevent the yuan’s exchange rate from changing too drastically.
Moreover, China has increased something called the macro-prudential adjustment parameter from 1.5 to 1.75. This might sound complicated, but it basically means that companies and banks can now get more money from overseas sources. It helps them have more options for funding their activities.
This change aims to guide businesses and financial institutions to better manage their debts and assets. It’s like giving them more tools to balance their money matters effectively.
China last made a similar adjustment in July 2023, showing that these efforts are ongoing to support growth and keep the economy steady.
Reference(s):
China moves to stabilize yuan, expands cross-border financing
cgtn.com
