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The People's Bank of China says China will further reform the RMB exchange rate regime and enhance the RMB exchange rate flexibility.
In a statement on Saturday, China's central bank made the decision in view of the recent economic situation and financial market development at home and abroad. It also considered the balance of payment situation in China.
In further proceeding with reform of the RMB exchange rate regime, continued emphasis will be placed to reflecting market supply and demand with reference to a basket of currencies. The exchange rate floating bands will remain the same as previously announced in the inter-bank foreign exchange market.
The People's Bank of China will also further enable markets to play a fundamental role in resource allocation as well as in achieving the macro-economic and financial stability in China.
The stability of the RMB exchange rate has played an important role in mitigating the economic crisis' impact, contributing significantly to Asian and global recovery, and demonstrating China's efforts in promoting global re-balancing.
The gradual recovery of the global economy and upturn of the Chinese economy have become more solid with enhanced economic stability. It is desirable to proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility.