Central Bank: The RMB exchange rate has a solid foundation for maintaining basic stability at a reasonable and balanced level
On September 11, 2023, the National Conference on Self discipline Mechanisms in the Foreign Exchange Market was held in Beijing. The meeting discussed the recent situation of the foreign exchange market and the issue of the RMB exchange rate. Representatives from the relevant guidance department and eight core member institutions of the foreign exchange market self-discipline mechanism attended the meeting.
The meeting believes that although the Chinese yuan has depreciated against the US dollar in recent times, it has maintained basic stability against a basket of currencies and relatively strong against non US major currencies. The foreign exchange market is operating steadily, and market expectations are generally stable. With the gradual introduction and implementation of domestic policies to stabilize the economy and expectations, the year-on-year growth rate of prices has bottomed out and turned positive, the import and export data has been better than expected, the effect of real estate policies has gradually become apparent, consumption has significantly rebounded, technological innovation continues to break through, high-quality economic development continues to advance, and the potential for economic progress is accumulating. The RMB exchange rate has a solid foundation for maintaining basic stability at a reasonable and balanced level.
The meeting emphasized that maintaining the basic stability of the RMB exchange rate is a common desire of financial management departments, foreign exchange market self-discipline mechanisms, foreign exchange market members, enterprises, and residents. Under the strong leadership of the Central Committee of the Communist Party of China and the State Council, the financial regulatory authorities have the ability, confidence, and conditions to maintain the basic stability of the RMB exchange rate. When it is necessary to take action, they will resolutely correct unilateral and pro cyclical behavior, deal with behavior that disrupts market order, and prevent the risk of exchange rate overshoot. The self-discipline mechanism of the foreign exchange market should be guided by the financial management department, continuously guiding enterprises and financial institutions to establish the concept of "risk neutrality", and strengthening the supervision and self-discipline management of the behavior of members of the self-discipline mechanism. Foreign exchange market members should consciously maintain market stability, orderly carry out market making and self operated trading, and resolutely eliminate behaviors that disrupt the order of the foreign exchange market, such as speculation and customer incitement. Enterprises and residents should adhere to "risk neutrality", not blindly follow the trend, not gamble unilaterally, not gamble on certain positions, and maintain property safety.