SMM News: Yi Gang, governor of the people's Bank of China, said on June 7 that if trade frictions between China and the United States escalate, China has enough policy space to deal with it, including adjusting interest rates and reserve requirements. he
He also said that he is very confident that the RMB exchange rate will remain basically stable at a reasonable and balanced level.
"We have a lot of room," Yi Gang said in an exclusive interview with Bloomberg in Beijing. "if things get worse, our monetary policy will respond effectively, and we have plenty of space in interest rates and reserve requirements.
Between. " However, Yi Gang said that at the moment, interest rates in China are at a relatively appropriate level.
"in fact, I see that China's economy is still resilient and strong," said Yi Gang. Fiscal policy has been very strong this year. The government has not only cut VAT rates in manufacturing and other industries, but also lowered social insurance premiums.
Rate. "this year's pro-active fiscal policy is very strong, probably the biggest in history."
According to figures released by the State Administration of Taxation, the country's cumulative new tax cuts reached 341.1 billion yuan in the first quarter of this year.
On the RMB exchange rate, Yi Gang said that he does not think a specific figure of the RMB exchange rate is more important, trade frictions may put temporary devaluation pressure on the RMB, but after the noise, the RMB will return to stability.
"We are very confident about maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level." Yi Gang said.
He pointed out that increasing the flexibility of the RMB exchange rate is beneficial to China and the global economy because it acts as an automatic economic stabilizer. Through exchange rate adjustments, it is possible to balance the balance of payments and manage expectations.
"I think a flexible RMB exchange rate mechanism is very useful and we will continue to adopt this market-oriented mechanism." Yi Gang said.
The renminbi has fallen about 2.6 per cent against the dollar since May. The central bank has stabilised market expectations by issuing offshore renminbi central notes, midpoints and shouts. The renminbi has fallen somewhat in recent trading days
At present, the exchange rate of the US dollar against the RMB is around 6.92.