Central Bank: The Chinese yuan has steadily risen against a basket of currencies
Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, stated on the 20th that the exchange rate of the renminbi against the US dollar is very important, but it is not the entire exchange rate of the renminbi. The exchange rate of the renminbi against a basket of currencies can more comprehensively reflect changes in the value of the currency. Since mid July, thanks to the steady recovery of the domestic economy, the Chinese yuan has steadily risen against a basket of currencies and maintained a relatively strong position against non US dollar currencies.
At the routine policy briefing held by the State Council on the same day, Zou Lan introduced that exchange rate fluctuations mainly regulate trade and investment in the real economy. Trade and investment are multilateral and involve multiple countries and currencies. Therefore, changes in the Renminbi against a basket of currencies can more comprehensively reflect the impact of the current exchange rate on trade, investment, and international balance of payments. On September 15th, the RMB exchange rate index was at 98.51, an increase of 1.8% from the end of June, with the RMB appreciating 2.5% against the euro and 4.1% against the Japanese yen.
"The overall appreciation of the Chinese yuan against non US currencies has maintained stability against foreign currencies while prioritizing domestic development." Zou Lan said that since mid July, the bilateral exchange rate of the Chinese yuan against the US dollar has weakened due to the strengthening of the US dollar index. But thanks to the steady recovery of the domestic economy, the exchange rate of the renminbi against a basket of currencies has remained stable and has risen, while maintaining a relatively strong position against non US dollar currencies.
Recently, various stable economic policies have been implemented one after another, and there have been more positive changes in the macroeconomic operation. Zou Lan believes that as China's economy continues to stabilize and improve, the basic stability of the RMB exchange rate at a reasonable and balanced level has a solid foundation. In the process of dealing with multiple rounds of external shocks, the People's Bank of China and the State Administration of Foreign Exchange have also accumulated rich experience in response, have sufficient reserves of policy tools, and have the ability, confidence, and conditions to maintain the stable operation of the foreign exchange market.
Zou Lan stated that in the next stage, the People's Bank of China and the State Administration of Foreign Exchange will aim to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, based on long-term considerations, starting from the current situation, implementing comprehensive policies, correcting deviations, and stabilizing expectations. They will resolutely correct unilateral and pro cyclical behavior, dispose of behavior that disrupts market order, and prevent the risk of exchange rate overshoot.