People’s Bank of China Governor Zhou
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- Says no worries about external payments despite falls in FX reserves
- Capital outflows could become reasonable if confidence improves on china economic growth, structural reforms
- Interest rates will play a bigger role in monetary policy
- Will gradually develop an interest rate corridor
- Monetary policy will mainly focus on China's economic conditions, rather than external factors
- Says he opposes competitive currency devaluations to boost exports
- China will not use currency depreciation to boost exports
And:
- Currency basket is becoming more important
- US dollar has biggest weight in currency basket
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- China will prevent bubbles in financial markets
- Chinese financial market volatility may stabilise if economic fundamentals improve
- China needs to be vigilant about rising debt levels
- China has strong desire to boost stock financing, reduce reliance on debt financing, but needs time
- Still studying reform plans for financial regulatory regime
- Monetary policy still effective for global economy but impact may decline
- China should put more emphasis on fiscal policy, structural reforms
- Should give banks more leeway in setting mortgage rates, down payments for clients
- Efforts to control overall leverage should focus on the corporate sector