China is confident in its ability to maintain the stability of the yuan (central bank) _French.news.cn

BEIJING, Aug. 5 (Xinhua) – China's central bank reaffirmed on Monday that it has the confidence and ability to keep the yuan exchange rate fundamentally stable.

The People's Bank of China (PCB) on Monday attributed the weakening of the currency beyond seven yuan to the US dollar to factors such as unilateralism and protectionism, as well as the expectation of tariffs additional information on Chinese products.

Despite the recent weakening, the yuan has risen 20% against the dollar over the last two decades, the biggest rise against other major currencies, said the central bank in a statement.

The yuan remained fundamentally stable and strong against a basket of currencies, while the yuan's composite exchange rate index under China's Foreign Exchange Trading System rose 0.3% from the beginning. of the year.

Although the central parity rate of the yuan was devalued by 0.53% against the dollar this year (until August 2nd), its depreciation was smaller than the Korean won, the Argentine peso and the Turkish lira.

"The PCB has the experience, the confidence and the ability to keep the exchange rate of the fundamentally stable yuan at a reasonable and balanced level," said a statement.

The exchange rate of the yuan is determined by long-term economic fundamentals, although it is also affected by market supply and demand, as well as the fluctuation of the dollar in the short term.

From a macro point of view, the yuan exchange rate is supported by the solid fundamentals of the economy, strong economic resilience, stable fiscal position, controllable financial risks, balanced inflow of transnational capital, and a sufficient reserve of capital. foreign currency.

According to the central bank, China could become a hotbed for international capital, as the country is the only economic power maintaining a normal monetary policy, while many developed economies have relaxed their monetary policies.

The bank has accumulated considerable experience and necessary policies by adapting to exchange rate fluctuations and will continue to innovate and improve its toolbox, combat short-term speculation and stabilize the expectations of the Bank. market in the future, the statement said.