Financial Regulatory Forum

Days of “special” yuan policy numbered – China central banker

By Zhou Xin and Benjamin Kang Lim

BEIJING, March 6 (Reuters) – China flagged on Saturday it will let the yuan resume its rise at some point as it unwinds the super-loose policies it has been pursuing to prop up the world’s third-largest economy.

China is under intense pressure from the United States and Europe to abandon the exchange rate peg it instituted of around 6.83 yuan per dollar since mid-2008 to preserve the competitiveness of its exporters during the international financial crisis.

Speaking during the annual session of China’s parliament, central bank governor Zhou Xiaochuan said Beijing would eventually have to drop this “special” yuan policy, one of a range of emergency measures taken to cushion the blow to growth.

“Practice has shown that these policies have been positive, contributing to the recovery of both our country’s economy and the global economy,” Zhou told a news conference.

But he added: “The problem of how to exit from these policies arises sooner or later.”

China’s forex reserves are ‘diversified,’ – central bank chief

By Zhou Xin and Simon Rabinovitch
BEIJING, July 17 (Reuters) – China’s $2 trillion stockpile of foreign exchange reserves, the world’s largest, is diversified despite the vast amount held in U.S. Treasuries, the Chinese central bank chief said on Friday.
Zhou Xiaochuan’s apparent satisfaction with China’s current dollar-heavy investment portfolio contrasted with calls he has made this year for a new super-sovereign currency to end the greenback’s dominance. (more…)

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