BEIJING, July 14 — China does not seek to gain an international competitive edge through currency depreciation, said the People's Bank of China's (PBOC) deputy governor Zou Lan, reported Xinhua.
He noted that the United States (US) Dollar Index and US Treasury yields have experienced increased volatility, resulting in spillover effects across global financial markets.
By comparison, China's financial market has demonstrated strong resilience and operated smoothly. Since the release of the joint statement on the China-US economic and trade talks in Geneva in May, the RMB (renminbi) has shown two-way fluctuations against the US dollar, remaining stable below 7.2.
"At present, the US dollar's trajectory remains uncertain, while China's domestic fundamentals have seen continued improvement, providing a strong foundation for the RMB to maintain two-way flexibility and overall stability," Zou said during a press conference.
He added that as major developed economies enter a rate-cut cycle, and market expectations grow for the US Federal Reserve to resume interest rate cuts, the interest rate differential between China and the US is expected to narrow.
China's balance of international payments has achieved a basic equilibrium, with stable operation in its financial market, and its exchange rate market has seen considerable improvements.
Zou said that the PBOC will continue to let the market play a decisive role in determining the exchange rate, with further efforts to maintain exchange rate flexibility, strengthen expectations management, guard against the risk of excessive fluctuations, and keep the RMB exchange rate basically stable at a reasonable and balanced level.
— Bernama
