People's Bank of China (PBOC) Deputy Governor Pan Gongsheng said on Thursday, the two-way fluctuation of the yuan will become a new normal.
Companies should avoid 'procyclical' and 'naked' foreign exchange risk management.
Yuan exchange rate has shown two-way volatility but has been basically stable so far this year.
China's current account surplus remains in reasonable range.
Supply and demand remain balanced in fx market, China's fx reserves have steadily increased.
Factors influencing yuan exchange rate are complicated, two-way volatility will become normal.
Companies' thinking on keeping fx risk neutral has strengthened.
Companies' fx risk management skills are steadily improving.
Will expand quotas under outbound QDII scheme.
Will launch unified local and foreign currency cash pool pilot scheme for multinational companies.
China's fx market has shown obvious seasonality.
Overseas listed companies' dividend payments, foreign companies' repatriated income, and overseas students' fx purchases for tuition and other expenses will affect yuan in June-August period.
Ultra-loose policy stimulus has boosted valuations in global financial markets.
International financial markets face correction risk from high levels.
Correction in international financial markets could lead to a rise in global risk-off sentiment and changes in cross-border capital flows.
Will improve mechanisms against money laundering, terrorism financing and tax evasion.
His comments come after the PBOC Chief Yi Gang vowed to “keep yuan exchange rate basically stable at reasonable levels.”
The central banker also said that China’s interest rates are at appropriate levels.
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