China Central Bank Chief Vows Prudent 2012 Monetary Policy

The People’s Bank of China will maintain a “prudent” monetary stance to ensure policy remains stable in 2012 and improve its management of foreign-exchange, Governor Zhou Xiaochuan said.

The central bank will “deepen financial reform, accelerate the development of financial markets, and strengthen and improve foreign-exchange management,” Zhou said in a New Year message on the PBOC’s website. Also today, Caixin magazine quoted Zhou as saying that while the yuan is near equilibrium, the currency’s trading band may widen to more than its current 0.5 percent on either side of the central bank rate.