By South China Morning Post | Created at 2025-01-06 08:21:22 | Updated at 2025-01-07 19:28:46
1 day ago
China’s central bank has signalled its resolve to stabilise the yuan’s exchange rate, with a stronger tone taken during its latest policy meetings, as the Chinese currency looks to be directly affected by US president-elect Donald Trump’s policies.
In its fourth-quarter monetary policy meeting, the People’s Bank of China highlighted “the resilience of the foreign-exchange market”, a shift from its previous focus on “exchange-rate flexibility”.
It will also “resolutely” prevent the formation of one-sided expectations and self-reinforcement and “guard against the risk of excessive exchange-rate adjustments”, according to the PBOC’s statement on Friday statement and its annual work conference on Friday and Saturday.
The change in wording reflects the PBOC’s firm determination to maintain the stability of the yuan’s exchange rate, according to the Financial News, a newspaper under the central bank.
“This also serves as an important reference for assessing the future direction of exchange-rate policies, helping to stabilise market expectations,” the newspaper said, adding that the bank has a “well-equipped toolbox and extensive experience” in dealing with the yuan’s depreciation.
Shan Hui, chief China economist at Goldman Sachs, said in a Sunday report that the policy-focus change from “flexibility” to “resilience” suggested “a shift towards controlling the pace of depreciation in response to US-tariff announcements”.
