China's Foreign Exchange Agency Dismisses Rumors of Compulsory Foreign Exchange Sale
Yicai Global
/SOURCE : Yicai
China's Foreign Exchange Agency Dismisses Rumors of Compulsory Foreign Exchange Sale

(Yicai Global) Jan.19 --Wang Chunying, spokesperson of the Chinese State Administration of Foreign Exchange (SAFE), denied rumors that SAFE planned to force people to change foreign currencies into yuan.

"I haven't got any information about it,"Wang said at press conference today."People should refer to formal documents issued by relevant government departments if they want to find further details of the policy, rather than trust rumors."

She did say, however, that pressure caused by cross-border capital outflow and inflow requires development of effective countermeasures from the perspective of risk prevention, and they must be carefully assessed and implemented based on the situation in China and abroad.

As a fundamental principle, she stressed, SAFE will continue to focus on trade and investment facilitation and support the real economy in line with the essential requirement of'making progress while maintaining stability.'Regulation will meanwhile be tightened to suppress illegal foreign exchange activities, and authenticity and compliance reviews will be effectively implemented.

Wang said that yuan exchange rates will be decided by fundamentals from the mid- to long-term perspective, and the consensus is that no basis exists for continued yuandevaluation, given China's current economic fundamentals. Of course, short-term fluctuations in exchange rates cannot be avoided, but they are a normal phenomenon. She further advised market participants to make their decisions objectively.

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