China takes action to steady the yuan, broadens cross-border financing opportunities
China's financial regulators recently emphasized their commitment to maintaining a stable exchange rate for the yuan, ensuring it remains at a reasonable and balanced level.
TroibNews 
China's financial regulators have recently affirmed their commitment to maintaining a stable exchange rate for the yuan, ensuring it remains at a reasonable and balanced level. This assurance was made during a meeting involving the People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE), as stated by the China Foreign Exchange Committee.
The committee, which includes regulators from the PBOC and SAFE along with industry representatives, is tasked with providing guidance on the foreign exchange market. It outlined plans to address certain market behaviors that are pro-cyclical, mitigate disruptions in market order, and prevent the possibility of the exchange rate overshooting.
"China has the confidence, conditions and ability to maintain stable operation of the foreign exchange market," remarked PBOC Governor Pan Gongsheng during his address at the 18th Asian Financial Forum held in Hong Kong on Monday.
In a related development to further support the yuan's stability, China has increased a crucial parameter in its macro-prudential management to broaden the sources of cross-border financing available to companies and financial institutions.
According to a joint statement from the PBOC and SAFE, the macro-prudential adjustment parameter, which determines the upper limit of outstanding cross-border financing, has been raised from 1.5 to 1.75. This parameter was last adjusted in July 2023.
The purpose of this change is to enhance macro-prudential management and assist enterprises and financial institutions in optimizing their asset-liability structures, the statement noted.
Jessica Kline contributed to this report for TROIB News
The committee, which includes regulators from the PBOC and SAFE along with industry representatives, is tasked with providing guidance on the foreign exchange market. It outlined plans to address certain market behaviors that are pro-cyclical, mitigate disruptions in market order, and prevent the possibility of the exchange rate overshooting.
"China has the confidence, conditions and ability to maintain stable operation of the foreign exchange market," remarked PBOC Governor Pan Gongsheng during his address at the 18th Asian Financial Forum held in Hong Kong on Monday.
In a related development to further support the yuan's stability, China has increased a crucial parameter in its macro-prudential management to broaden the sources of cross-border financing available to companies and financial institutions.
According to a joint statement from the PBOC and SAFE, the macro-prudential adjustment parameter, which determines the upper limit of outstanding cross-border financing, has been raised from 1.5 to 1.75. This parameter was last adjusted in July 2023.
The purpose of this change is to enhance macro-prudential management and assist enterprises and financial institutions in optimizing their asset-liability structures, the statement noted.
Jessica Kline contributed to this report for TROIB News
