PBOC Says Yuan Rate Isn’t a Tool to Offset Commodity Inflation
(Bloomberg) -- The exchange rate of the Chinese currency can’t be used as a tool to spur exports or to offset the impact of commodity price surges, the People’s Bank of China said in a statement on Thursday.
The foreign exchange market is currently “balanced” and the yuan rate could go either way in the future as many market elements and policies could affect the rate, according to the central bank.
“The key is to properly manage expectations, firmly crack down on attempts to manipulate the market or ‘maliciously’ create one-sided expectations,” the statement said. “Enterprises and financial institutions should adapt to a two-way fluctuation of the exchange rate.”
The yuan’s rally gathered pace on Thursday, with the Chinese currency climbing to its strongest level since March 2016 against a basket of trading partners.
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