China's central bank governor vows to keep RMB stable

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Last updated at: (Beijing Time) Tuesday, October 28, 2003

China's central bank governor vows to keep RMB stable

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Zhou Xiaochuan, governor of the People's Bank of China, said on Monday that China will keep the fundamental stability of its currency, the Renminbi (RMB), take measures to promote the economic growth of the non-public sector, and make fiscal and financial reforms.

In an exclusive interview with Xinhua, following the Fifth Meeting of Ministers of Finance and Central Bank Governors held on Oct. 26-27 at the Mexican city of Morelia in the southwestern state of Michoacan, Zhou talked about the RMB stability, the global economy and the "double deficit" of the US economy.

As for the RMB exchange rates, Zhou affirmed that China, on a reasonable and balanced basis, will continue to maintain the fundamental stability of the Chinese currency and will decentralize, in a selective and gradual way, the capital accounts,so as to achieve the capital account convertibility of the RMB.

Zhou said China has decided to reform its financial system, including reducing non-performing assets and increasing capital input to banks, in order to make the Chinese financial system well prepared for the globalization under conditions of the market economy.

These measures will not only speed up the commercial development, impulse the trade liberalization and promote the flowof capital in two directions, but also lay a good foundation for improving the system of exchange rates for the RMB against other currencies in the future, Zhou said.

He also addressed the issue of the international balance of payments of some developed countries, especially the imbalances in the current account.

He said the new policies oriented to giving an impulse to economic reforms will favor the expansion of cooperation with other countries in the economic globalization process, and help reduce the imbalance in the international balance of payments.

Referring to the over-dependence of the global economy on only a few developed countries, particularly the United States, Zhou agreed to the analysis of the important role of the US economy at the end of the 1990s.

He was also concerned about the double deficit of the US economy, indicating that the trade liberalization will favor the re-adjustment of its double deficit and the growth of the global economy.

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