Chinese central bank officials said Monday that the country is capable of strengthening its currency and that the yuan's fluctuation is normal, after the Chinese currency touched a more-than-two-year low against the dollar on Monday.
"Although the yuan is affected by the spillover effects of U.S. monetary policy, the impact is controllable," said Liu Guoqiang, vice governor of the People's Bank of China.
At the same press conference, China's National Development and Reform Commission underscored that the third quarter is crucial for rolling out policy measures and that the second half of the year is a key period to make up for losses caused by Covid-19 outbreaks in the second quarter.
China recorded its weakest growth rate in more than two years in the second quarter, as stringent lockdowns left millions of residents in Shanghai confined to their homes for two months and many businesses closed as authorities tried to snuff out coronavirus outbreaks across the country.
The second half of the year "is the golden period for policies to play a role," said Yang Yinkai, deputy secretary-general of the National Development and Reform Commission. "We must seize the time window and decisively introduce policies to effectively maintain the momentum of economic recovery and development," said Mr. Yang.
Although the economic recovery is not yet solid, Mr. Liu said the PBOC will avoid flooding the economy with stimulus.
"Currently, there is still plenty of room for monetary policy in China," he said. "There is no shortage of policy tools; neither price tools nor quantitative tools," Mr. Liu added.
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(END) Dow Jones Newswires
09-05-22 0619ET
