Chinese currency, the yuan, will "automatically" stabilize this year amid a firming economy and global confidence in the country's growth prospects, central bank governor Zhou Xiaochuan said Friday.
"There will not be big changes in central bank policies in 2017, and we will have more detailed work on policy implementation and supervision," Zhou said at a press conference on the sidelines of the annual parliamentary session.[Special coverage]
He also noted unpredictability in the foreign exchange market due to uncertainties both at home and abroad, saying fluctuations will be normal.
Zhou attributed yuan's exchange rate fluctuations in the latter half of last year to outbound investment and forex spending, which he said were bigger than past years.
Surge in U.S. dollar value following "unexpected" changes in the wake of U.S. presidential election was also partly to blame, he added.
The Chinese currency weakened more than 6 percent against the U.S. dollar last year, but had remained relatively stable against a basket of other currencies.
In response to a question on the interest rate differential between China and the United States, Zhou said the rate changes will not necessarily lead to notable and persistent capital flows over the medium and long term, although there might be speculative activities in the short term.
In the government work report delivered by Premier Li Keqiang, China pledged to continue market-oriented reform in the RMB exchange rate mechanism and maintain the currency's stable position in the global monetary system.
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China's forex reserve decline normal: central bank governor
The dropping trend in China's foreign exchange reserve is a normal phenomenon, the country's central bank chief said Friday.
"China does not want that much forex reserve," Zhou Xiaochuan, governor of the People's Bank of China (PBOC), said at a press conference on the sidelines of the annual parliamentary session.
