Recently, market expectations have changed somewhat amid new developments in the global economy and trade frictions. As a result, many currencies have depreciated against theUS dollar since the beginning of August. The RMB exchange rate has also seen some fluctuations, which are driven and determined by market forces.
As a responsible country, China will abide by exchange rate commitments made at G20 Leaders' Summits. China will remain committed to the market-based exchange rate regime, refrain from competitive devaluations, and will not target exchange rate for competitive purposes. Exchange rate will not be used as an instrument indealing with trade disputes or other external disruptions. The PBC has been strongly committed to maintaining the RMB exchange rate basically stable at an equilibrium and adaptive level, and we believe our efforts have been widely recognized.
At present, China's economy is growing steadily. Its growth rate is one of the highest among major economies, reflecting the economy's strong resilience,potential, and room for adjustments. China's balance of payments are broadly in balance, and foreign exchange reserves remain abundant. An increasing number of firms are hedging their foreign exchange risks in theforeign exchange market. The interest rate spreads between China and other major economies are at an appropriate range. These factors are expected to support the RMB and ensure its broad stability.
The PBC and SAFE will maintain the stability and continuity of the foreign exchange policy to meet the legitimate and reasonable demand of enterprises and individuals. Foreign exchange policy reform and opening-up will be deepened to further promote cross-border trade and investment facilitation, and to better serve the need to develop the real economy and fit the new landscape in opening-up at all fronts.
Both China'seconomic fundamentals and market supply and demand support the assessment that the current RMB exchange rate is at an appropriate level. Despite of recent volatilities driven by external uncertainties, I am quite confident RMB will remain a strong currency. The PBC is fully equipped with the experiences andthe capacity to support smooth operation of the foreign exchange market, and keep the RMB exchange rate basically stable at an equilibrium and adaptive level.
