PBOC vows to maintain the stability of renminbi

The People's Bank of China, the country's central bank, has reinforced its commitment to guarding the stability of the renminbi exchange rate after taking effective measures to cope with a transitory weakening of the Chinese currency in the past months.

With an eye on the long run and a start from the present, the PBOC said it is essential to firmly rectify any cyclical market behaviors, resolutely address any actions that disturb the market order and decisively guard against the overshooting risks of the renminbi exchange rate.

"We need to ward off the formation of self-reinforcing unidirectional expectations and keep the renminbi exchange rate overall stable at a reasonably balanced level," the central bank said in its third-quarter monetary policy report published on Nov. 27.

Experts close to the central bank said the statements have shown monetary policymakers' determination to safeguard foreign exchange market stability after taking resolute steps to mitigate the transitory depreciation pressure of the renminbi while upholding the dominant role of market forces in foreign exchange rate formation.

The renminbi exchange rate has shown a strengthening trend recently amid falling US Treasury yields and positive changes in domestic economic recovery, they said, adding that there is a solid basis for the Chinese currency to stay stable.

The central parity rate of the onshore renminbi against the US dollar came in at 7.1132 on Tuesday, the strongest level since June, according to market tracker Wind Info.