Ex-PBOC’s Sheng: China should monitor inflows, rapid yuan appreciation

Dhwani Mehta FXStreet

The People’s Bank of China (PBOC) should pay close attention to the large short-term capital inflows and the rapid yuan appreciation, said Sheng Songcheng, former Head of the Statistics Department at the central bank while addressing a wealth management forum on Thursday.

Key quotes

“China's exchange rate regime does not need to be fundamentally changed, but the country should closely monitor large short-term capital inflows and the risk of a rapid yuan appreciation.”

“Large short-term capital inflows could raise imported inflationary pressures and push up domestic asset prices.”

Market reaction

The yuan has risen more than 6% from the May lows against the dollar. At the press time, USD/CNY rises 0.36% to 6.7770, courtesy of the upbeat Fed economic assessment.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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