PBoC Deputy Governor Says Too Early to Call It Financial Crisis, RMB Will Be Stable

iFeng: 一行两会重磅发声！人民币汇率、物价、A股、房地产…这些问题都回应了

Chen Yulu, deputy governor of the People's Bank of China, said that the recent spread of the international epidemic has affected the turbulence in the international financial market. Indeed, we see that stock markets in Europe, America, and many emerging market economies have fallen by an average of about 30%. This situation has also attracted great attention from the international community.

It is too early to conclude that the world has entered a financial crisis.

The international financial crisis usually has three basic characteristics: First, whether there is a continuous panic decline in the international financial market across markets. The second is whether a large number of financial institutions have failed, especially systemically important financial institutions. The third is to see if the operation of the global real economy has been seriously damaged. At present, in response to the intensification of international financial market turbulence, many countries have successively introduced some countermeasures. The effects of these measures have yet to be observed.

The overall price situation will gradually ease

Chen Yulu said that the overall price situation will gradually ease, and it is expected to gradually decline in the second, third and fourth quarters.

The actual financing cost of Chinese enterprises has fallen

Recently, many international central banks have adopted interest rate cuts. Will China's central banks follow suit?

As far as China's situation is concerned, Chen Yulu pointed out that the previously issued 300 billion yuan special re-loan key guarantee enterprises have exceeded 5,000, and the loans obtained have exceeded 200 billion yuan, and the actual financing cost is only about 2.27%.

At the same time, the People's Bank of China is also actively guiding the market interest rate downward.

The corporate loan interest rate level has dropped significantly. At present, the general loan interest rate is 5.49%, which is 0.61 percentage point lower than before the LPR reform. For the next stage of monetary policy, Chen Yulu pointed out that monetary policy is mainly to grasp the strength, rhythm and focus in stages, and always maintain a reasonable and adequate liquidity; give full play to the unique role of structural monetary policy; give full play to the role of policy finance, Make good use of the 350 billion yuan of special policy bank credit lines; increase support for small and medium banks to supplement capital and issue financial bonds; continue to advance LPR reform.

It is expected that the exchange rate of RMB to USD will still fluctuate around 1: 7 in the future

Chen Yulu said that due to the recent international epidemic, there have been relatively large fluctuations in the international foreign exchange market. Although the RMB exchange rate has also fluctuated, on the whole, it has remained basically stable at a reasonable and balanced level.

The exchange rate of RMB against USD is expected to fluctuate around 1: 7 in the future, with depreciation and appreciation, and continue to float in both directions.

The foreign exchange market is running smoothly, and the exchange rate expectations are also stable. Xuan Changneng, deputy director of the State Administration of Foreign Exchange, also stated that there is no basis for a significant devaluation of the yuan.