China’s low inflation level is conducive to a stable Yuan – PBOC’s Chen

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    China’s central bank’s (PBOC) deputy head Chen was on the wires over the last hour, commenting on the domestic currency and monetary policy.

    Key Quotes:

    Spillover effect from global monetary policy divergence is increasing

    Global cooperation based on coordinated economic policies may weaken

    If emerging markets cannot solve the issue of duration mismatch during deleveraging process financial turmoil is possible

    China’s inflation is currently at relatively low level, conducive to a stable Yuan

    Yuan stable against a basket of currencies, no basis for persistent depreciation

    The benefit of Yuan depreciation for exports is limited

    Bank of international settlements estimates Yuan real effective exchange rate is around 10 pct overvalued

    China is still in the process of perfecting and improving open market operations
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