2023-06-08 

(Shanghai News) Pan Gongsheng, Vice President of the People's Bank of China and Director of the State Administration of Foreign Exchange, said on Thursday (June 8) that the interest rate increase cycle of the US Federal Reserve is nearing the end, the strengthening of the US dollar is difficult to sustain, the spillover effect is expected to weaken, and China's foreign exchange market is conditional on maintaining a relatively stable operation.

On the basis of Sina Finance and surging news reports, Pan Gongsheng said in his speech at the 14th Lujiazui Forum that since 2023, China's foreign exchange market has generally operated smoothly, cross-border capital flows have tended to be basically balanced from a high surplus at the beginning of the year, foreign exchange reserves have risen steadily, and the RMB exchange rate has remained basically stable at a reasonable and balanced level.

Influenced by factors such as the weaker than expected performance of China's economy and the stronger US dollar, the exchange rate of the RMB against the US dollar has continued to decline this year, falling to a six-month low of 1 US dollar (S $1.35) against 7.13 yuan after June. However, the Chinese authorities have yet to intervene.

Pan Gongsheng said that since the middle of April, the RMB exchange rate has fluctuated due to multiple internal and external factors, but the exchange rate expectations and cross-border capital flows in the foreign exchange market have remained relatively stable. Looking ahead, the stable operation of China's foreign exchange market still has a good foundation. The overall operation of the Chinese economy remains stable, while the US economy may face a mild recession. The economy is basically supported by the RMB exchange rate.

Li Yunze, Director of the National Administration of Financial Regulation of China, who attended the same forum, said in his speech that at present, China's financial industry is running steadily on the whole, risks are generally controllable, and it is fully conditional, confident and able to hold the bottom line of not having systemic financial risks.

This is Li Yunze's first public forum since taking office. He emphasized that strengthening and improving modern financial regulation is an important task in the current financial field. We must resolutely eliminate regulatory gaps and blind spots, clarify the boundaries of responsibility, tighten the chain of responsibility, strengthen comprehensive governance, and improve the responsibility system of multi subject participation, multi field cooperation, and multi-level connectivity, truly achieving "full coverage and no blind spots" in regulation.

Yi Huiman, chairman of the CSRC, responded to the recent fluctuations in China's stock market at the forum, saying that the CSRC attaches great importance to the supervision of the capital market, will continue to strengthen the monitoring and supervision of market transactions, do a good job in tracking and analyzing new trading methods such as quantitative trading, resolutely crack down on insider trading, Market manipulation and other violations, and earnestly maintain a healthy market order and ecology.