China has no need or intention to seek competitive edges in foreign trade through the depreciation of its currency, China's central bank governor said Friday.
Pan Gongsheng, governor of the People's Bank of China (PBOC), made the remarks at a press conference on the sidelines of the fourth session of the 14th National People's Congress.
"Since the beginning of this year, the Chinese yuan has appreciated against the U.S. dollar, due to China's continuously improving economy, the weaker dollar index and seasonal foreign exchange settlements by enterprises. At present, the bilateral yuan-dollar exchange rate is around the midpoint of its range in recent years," said Pan.
"China has no need or intention to obtain trade competitiveness through currency depreciation. The stance of the PBOC has always been clear. It adheres to the decisive role of the market in exchange rate formation, maintain exchange rate flexibility, strengthen expectation management, and keep the yuan generally stable at a reasonable and balanced level," he continued.
The influencing factors of exchange rates are very complex, such as geopolitics, unexpected events, monetary policies, and financial markets, Pan highlighted. Currently, there are significant changes in these factors globally, and the uncertainty is also very high. For example, he explained, the United States and Israel recently launched military strikes against Iran, which led to a substantial increase in the risk-aversion sentiment in the international financial market, as well as violent fluctuations of the U.S. dollar index and the exchange rates of the currencies of major economies.
More than 60 percent of China's import and export trade is now either settled in Chinese yuan or hedged with foreign exchange risk management tools, reducing the impact of exchange rate fluctuations on businesses, Pan noted, adding that this proportion is likely to increase this year.
During the 15th Five-Year Plan period (2026-2030), the PBOC will build a scientific and sound monetary policy system, strike a balance between short-term and long-term perspectives, between stabilizing economic growth and preventing risks, and between internal and external equilibrium, and advancing these efforts by coordinating the goals, tools, and transmission channels of monetary policies, Pan stated.
China has no need or intention to seek trade advantages via currency devaluation: central bank governor
