SHANGHAI, July 3 (Reuters) - Recent fluctuations in China’s foreign exchange market were largely due to a stronger U.S. dollar and external uncertainties, Yi Gang, governor of the People’s Bank of China (PBOC), said on Tuesday.
Yi’s remarks come at a time when the Chinese currency is under considerable pressure: The onshore yuan weakened past 6.7 per dollar in early trading on Tuesday for the first time since Aug. 9, 2017.
The central bank has closely watched recent fluctuations, Yi said, adding that China’s economic fundamentals were sound and financial risks were largely under control.
“International payments were stable, and cross-border capital flows were roughly balanced,” Yi said in a statement published on the PBOC’s website.
Yi said China must maintain its managed floating exchange rate regime, which is based on supply and demand and the yuan’s value against a basket of currencies. Experience had shown it to be effective.
Yi also added that China will continue to implement prudent and neutral monetary policy to keep the yuan basically stable at a reasonable level. (Reporting by Beijing Monitoring Desk Editing by Eric Meijer)