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China's central bank governor says yuan has stabilised against the dollar

China's central bank governor says yuan has stabilised against the dollarZhou Xiaochuan tells G20 meeting in Turkey the exchange rate ‘tends to be stable’ in the wake of the yuan’s devaluation and stock market chaos.

China’s central bank governor has told a meeting of the G20 that China’s currency has stabilised against the dollar after the country’s surprise announcement in August to revalue the yuan amid stock market turmoil.

Zhou Xiaochuan told a meeting of G20 finance ministers and central bank governors in Turkey that the exchange rate of the yuan against the dollar “tends to be stable”, according to a statement late on Saturday on the website of the People’s Bank of China.

“At present, the exchange rate of RMB against dollar tends to be stable, and most of the correction of the stock market has taken place, so the financial market is expected to be more stable,” the statement read.

Zhou’s comments appeared to be aimed at quelling fears Beijing might allow the currency, also known as the renminbi, to fall further to help its struggling exporters by giving them a price advantage. The devaluation had spurred warnings of a possible “currency war” if other governments responded by lowering their own exchange rates.

“At present, the exchange rate of the RMB against the dollar tends to be stable, and most of the correction of the stock market has taken place, so the financial market is expected to be more stable,” the statement read.

Zhou said Beijing was committed to carrying out economic reforms despite recent turbulence in its financial markets.

Also at the G-20 meeting, finance minister Lou Jiwei tried to defuse concern about the slowdown in Chinese economic activity, saying Beijing is “not especially concerned” about short-term fluctuations and will stick to its reform plans.

The ruling Communist Party is in the midst of a marathon effort to encourage domestic consumption and reduce reliance on trade and investment to drive growth. It has promised to give market forces a bigger role in the state-dominated economy.

Concerns have mounted, however, that growth is slowing too abruptly after July exports and auto sales contracted and August factory activity weakened.

Lou said the Chinese government expects economic growth of “about 7%” this year, according to the central bank statement.

“China is in line with plans and will stick unswervingly to ‘reform and opening up,’” he said.
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