Two-way fluctuations, either appreciation or depreciation, of China's currency renminbi will become the norm in the future, with its exchange rate continuing to depend on market supply and demand as well as changes in the international financial markets, a senior central bank official said on Sunday.
The managed floating exchange rate system based on market supply and demand, and adjusted with reference to a basket of currencies, is suitable for China at present and for a certain period of time in the future, said Liu Guoqiang, deputy governor of the People's Bank of China (PBOC).
The exchange rate of RMB has remained basically stable at a reasonable and balanced level this year and will continue in this manner, said Liu.
China has showed its ambitions in promoting the yuan's internationalization. At a recent forum, Zhou Chengjun, director of the PBOC Finance Research Institute, said the central bank "will eventually give up the exchange rate target."
"Under the condition of yuan internationalization, we have no ability to manage the yuan exchange rate," said Zhou, adding the exchange rate of yuan is determined by the preferences, expectations and transactions of all market players in the world.
