The People’s Bank of China (PBOC) should pay close attention to the large short-term capital inflows and the rapid yuan appreciation, said Sheng Songcheng, former Head of the Statistics Department at the central bank while addressing a wealth management forum on Thursday.
Key quotes
“China’s exchange rate regime does not need to be fundamentally changed, but the country should closely monitor large short-term capital inflows and the risk of a rapid yuan appreciation.”
“Large short-term capital inflows could raise imported inflationary pressures and push up domestic asset prices.”
Market reaction
The yuan has risen more than 6% from the May lows against the dollar. At the press time, USD/CNY rises 0.36% to 6.7770, courtesy of the upbeat Fed economic assessment.
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