PBOC: Strengthen The Implementation Of Monetary Policies To Resolutely Prevent The Risk Of Exchange Rate Overshooting

The 2023 third quarter (102nd overall) regular meeting of the Monetary Policy Committee of the People’s Bank of China held in Beijing on September 25 pointed out that the implementation of introduced monetary policies should be intensified to guarantee liquidity at a reasonable and sufficient level, ensure credit growth at a reasonable and steady pace, and maintain the growth rate of money supply and social financing to basically match the nominal economic growth rate. Besides, we should promote price recovery from low levels and keep proper prices. It’s also crucial to deepen the market-oriented reform of exchange rates and guide enterprises and financial institutions to adhere to the concept of “risk neutrality”. We will resolutely correct unilateral and procyclical behaviors through comprehensive policies, correction of deviations, and stabilization of expectations. Most importantly, we must resolutely prevent the risk of exchange rate overshooting and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.