China has maintained a stable foreign exchange rate and will steadily improve the opening of its financial market, as well as promote the liberalization of cross-border trade and investments, Pan Gongsheng, deputy governor of the People's Bank of China (PBOC), said at the Lujiazui Forum Thursday.
China's moves to strike a balance between flexibility and stability of the exchange rate are beneficial for both domestic and foreign markets as they will help avoid negative spillover in the global financial market, and curb competitive depreciation of major currencies, Pan said.
Foreign investors have bought 500 billion yuan ($72.3 billion) in China's bond market so far this year, including 168.8 billion yuan in May, and there is strong demand for foreign investors to allocate yuan assets, he noted.
Given that the China-US trade war continues to escalate, the yuan exchange rate has depreciated to some extent, while Chinese companies and citizens are behaving in a rational manner in the foreign exchange market and China's foreign exchange reserves have been steadily rising in 2019, Pan said.
The central parity rate of the Chinese yuan against the US dollar stood at 6.8934 on Thursday, according to PBOC Thursday.
China's foreign exchange reserves exceeded $3.1 trillion by the end of May, up $6.1 billion over the previous month, according to a statement of China's State Administration of Foreign Exchange Tuesday.
"Shanghai will be actively supported to cultivate a global yuan asset allocation and risk management center," Pan said, adding that Shanghai could enrich the currency's products and tools, improve its pricing power, promote the cross-border use of the yuan and improve the efficiency of its settlement ability.
China's financial market is opening up faster and has made substantive reforms in terms of expanding market access, enriching risk-hedging tools and others, and China's stock market and bond market have been gradually included in international mainstream indexes, he said.
