Central Banks
PBOC Should Be Prepped to Act Like Japan on FX, Ex-Official Says
- Onshore yuan fell to a fresh to a 15-year low on Monday
- Don’t rule out PBOC using FX reserves to boost yuan: Guan Tao
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Volatility in the yuan is still acceptable for China but it should stand ready to face down currency speculators with a greater force than Japan if needed, according to a former official at the country’s foreign exchange regulator.
Swings in the currency haven’t resulted in an economic shock or inflation, the market is still orderly and financial stability is intact, said Guan Tao, former director of international payment department at the State Administration of Foreign Exchange, in an interview with Bloomberg. That has prevented the People’s Bank of China from engaging in large-scale currency intervention, unlike its Asian neighbor, and volatility is “affordable,” he added.