China's currency policy should focus on controlling inflation while also considering the needs of a transformation in development and financial sector reform, Xu Zhong, director of the research bureau of the People's Bank of China, the country's central bank, said on Monday.
Xu proposed a steady and neutral currency stance, according to an article published in the Journal of Financial Research on Monday.
He also noted that the country's central bank had recently launched a crackdown on speculators to prevent capital outflows, and it had also concentrated on stabilizing the exchange rate of the yuan and the level of the nation's foreign exchange reserves.
Realizing the boundaries of currency policy, Xu suggested that it should coordinate with other policies, and most importantly, it should be based on supply-side structural reform.
