China Central Bank Adviser Says Market Will Play Bigger Role in Setting Yuan

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Bloomberg’s Emma O’Brien reports on China’s decision to make a change to the regime used to manage the yuan. (Source: Bloomberg)

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By Jacob Gu, Ye Xie, and George Lei

January 9, 2018 at 11:51 PM UTC

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China’s move to tweak its management of the yuan fixing mechanism shows authorities’ desire to further liberalize the exchange rate, according to an adviser to the People’s Bank of China.

“The counter-cyclical factor was designed to reduce irrational herd mentality,” said Huang Yiping, a professor at Peking University and a member of the PBOC’s Monetary Policy Committee, in an interview in New York. Now that the exchange rate “has stabilized for quite some time, the market force should play a bigger role,” he said.