Securities Times reporter He Jueyuan
On May 19, the People’s Bank of China announced that the first meeting of the China Foreign Exchange Market Steering Committee (CFXC) in 2023 was held in Beijing on the afternoon of the 18th. Members attending the meeting discussed the recent operation of the foreign exchange market, and put forward opinions and suggestions on issues such as the reform, development and regulation of the foreign exchange market.
The meeting held that in recent years, my country’s foreign exchange market has developed steadily and healthily, the reform of exchange rate marketization has been steadily promoted, and the two-way fluctuations and flexibility of the RMB exchange rate have been enhanced, which has effectively played the role of an automatic stabilizer for the macro economy and the balance of payments, and created conditions for enhancing the autonomy of monetary policy. Thanks to the concerted efforts of all parties, significant progress has been made in the exchange rate risk neutrality work in the foreign exchange market, a long-term mechanism has been initially established, the concept of corporate risk neutrality has been continuously strengthened, and banks’ risk neutrality management has been continuously consolidated, which is conducive to promoting the stability and long-term development of the foreign exchange market.
The meeting pointed out that the recent global economic and financial situation is complicated and severe. The developed economies have high interest rates, high inflation, and high debt. Strong support has been formed, and the two-way fluctuations in the RMB exchange rate have been obvious in recent days. At present, my country’s macroeconomic market, balance of payments market, and foreign exchange reserves market are stable, and financial institutions, enterprises and residents have generally stable expectations for exchange rates, which are a solid foundation and strong guarantee for the smooth operation of the foreign exchange market. At the same time, the breadth and depth of my country’s foreign exchange market are expanding day by day, and it has the ability to balance independently. The RMB exchange rate also has correction forces and mechanisms, which can maintain basic stability at a reasonable and balanced level.
The meeting emphasized that under the strong leadership of the Party Central Committee and the State Council, the national economy has continued to recover, and the accumulation of positive factors has increased. In the next stage, the People’s Bank of China and the State Administration of Foreign Exchange will strengthen supervision, management, monitoring and analysis, strengthen guidance on expectations, correct pro-cyclical and unilateral behavior when necessary, and curb speculation. The member units of the self-regulatory mechanism must consciously maintain the basic stability of the foreign exchange market and resolutely restrain the fluctuations of the exchange rate. Actively implement self-regulatory norms, study and strengthen self-regulatory management of US dollar deposit business, improve the level of exchange rate hedging services for enterprises, reduce the cost of exchange rate hedging for small, medium and micro enterprises, and better serve the real economy.
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