China is taking decisive steps to ensure the yuan remains stable and operates within a reasonable and balanced range, according to recent statements from the country’s financial regulators.
The People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) announced comprehensive measures aimed at stabilizing market expectations, enhancing resilience, and improving the management of the foreign exchange market. These initiatives are part of the efforts by the China Foreign Exchange Committee, which includes regulators from the PBOC, SAFE, and industry participants, to provide clear guidance on foreign exchange policies.
In addition to maintaining yuan stability, China is expanding cross-border financing options for companies and financial institutions. The macro-prudential management parameter, which sets the upper limit for outstanding cross-border financing, has been increased from 1.5 to 1.75. This adjustment, the first since July 2023, is designed to encourage businesses to optimize their asset-liability structures and access a broader range of funding sources.
“China has the confidence, conditions and ability to maintain stable operation of the foreign exchange market,” stated PBOC Governor Pan Gongsheng at the 18th Asian Financial Forum in Hong Kong, highlighting the country’s commitment to economic stability and growth.
These measures reflect China’s ongoing strategy to support its financial markets and provide greater flexibility for enterprises navigating the global economic landscape.
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China moves to stabilize yuan, expands cross-border financing
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