China central bank says will keep yuan stable to help exporters

BEIJING (Reuters) -China will continue to keep its currency stable and make timely adjustments to its policy tools to help struggling exporters, a central bank deputy governor said on Thursday.

The country’s cabinet on Wednesday flagged the possibility of timely cuts in the amount of cash banks must hold as reserves to support struggling small firms which have been squeezed by surging raw material prices.

“We’ve noticed that some companies may have this issue, so we will continue to keep the exchange rate stable and make timely adjustments to the policy tools,” Vice Governor Fan Yifei told a press conference, when asked about the issue that exporters are loss-making on all of their orders.

The yuan weakened on Thursday as the dollar traded near its highest levels in three months and after China’s cabinet floated the possibility of cuts to banks’ reserve requirements to support economic growth.

The government will continue to push real lending rates lower and reduce financing costs for small companies through targeted monetary policy tools, Fan added.

Fan also weighed in on cryptocurrencies, voicing concern from the Chinese regulator over so-called “stablecoins”, which he said were regarded as speculative tools that threaten financial and social stability.

WHile the regulator is cracking down on the crypto market, Fan said the People’s Bank of China’s own digital currency would be trialed during Beijing’s Winter Olympic Games.

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