China said it can’t stop intervention in the yuan because economic growth is too weak and capital flows aren’t steady enough to warrant changes.
“The U.S. side has repeatedly asked, in terms of exchange-rate policy, whether China needs to intervene any more,” Finance Minister Lou Jiwei said at a press briefing yesterday in Beijing during economic talks between the countries. “But for us, under the current situation, when the economy hasn’t recovered fully and when cross-border capital flows are not completely normal, we’ll continue” existing practices, he said.
The comments signal China may move more slowly than the U.S. wants on liberalizing currency policy after it widened daily trading limits in March and the central bank said it would eventually end normal intervention in the market. Lou spoke hours after Treasury Secretary Jacob J. Lew said moving to a market-determined exchange rate will be a “crucial step” in helping drive China’s economic growth.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.