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Wang Chunying, spokesperson of the State Administration of
Foreign Exchange (SAFE), cited a range of factors for her upbeat
assessment, including the strength in the Chinese economy, an
expected current account surplus, continued foreign investment
and an optimized foreign debt structure.
"Of course, the foreign exchange regulator will also... closely
monitor the pace of the monetary policy changes by the U.S. Fed
and their spillover impact, evaluate the operations of our
country's foreign exchange market in real time and effectively
maintain market stability," said Wang.
A more hawkish U.S. Federal Reserve, the vanishing Chinese yield
advantage and rising concerns over domestic economic growth have
dragged the yuan, or renminbi, to seven-month lows, with
analysts expecting more downward pressure on the currency in
coming months.
However, Wang expects the yuan to stay basically stable at
reasonably balanced levels, adding that the recent volatility
was mostly due to impact from global market fluctuations and
changes in supply and demand.
"China has been able to implement a normal monetary policy and
its financial system is relatively stable and independent.
Uncertainties from abroad would have a smaller impact on the
yuan exchange rate," Wang added.
She also expects foreign investment in Chinese securities to
stabilize.
Chinese stocks have been hovering at their lowest level in two
years, as strict COVID-19 lockdowns paralysed economic activity
in many big cities, even as authorities vowed to provide more
help to hard-hit firms.
(Reporting by the Beijing Monitoring Desk; Editing by Toby
Chopra)
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