After six months of silence, People’s Bank of China Governor Zhou Xiaochuan has spoken publicly twice in two weeks, reiterating his view that major depreciation of the yuan is unnecessary for the foreseeable future.
Zhou said there was “no basis for sustained yuan depreciation” and sought to dampen fears of a currency war, stating that China “won’t use competitive devaluation to boost exports,” according to local media reports. He was speaking Friday at a press conference ahead of the beginning of a G-20 meeting of central bank governors and finance ministers in Shanghai.
Zhou, who is the longest-serving central bank head among the group of 20 countries meeting in Shanghai this week, is also cohosting the event with China’s finance minister Lou Jiwei.
In a separate statement issued by the PBOC on the sidelines of today’s meeting, current monetary policy in China was described as being “prudent with a slight easing bias.”
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The statement also addressed widespread concern about China’s capital outflows in recent months, as well as the spending of foreign reserves required to pump up the yuan.
“China’s foreign reserves will also be kept around an appropriate and reasonable level,” the statement read, according to local media reports.
Following Zhou’s comments and the PBOC statement, Mainland markets were calm on the first day of the G-20 conference. After falling 6.4 percent yesterday, the Shanghai Composite Index rose almost 1 percent Friday.