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    Zhou Xiaochuan: Foreign Exchange Management Reform Will First Realize The Basic Convertibility Of Direct Investment.

    2011/1/6 10:12:00 47

    Zhou Xiaochuan's Foreign Exchange Management Reform


    Governor of the Central Bank of China

    Zhou Xiao Sichuan

    In an interview with the latest issue of the China Central Bank's "China finance" magazine, he said the next stage

    RMB capital

    The reform of foreign exchange management will take the lead in realizing the basic convertibility of direct investment.

    Zhou Xiaochuan also listed the main measures to promote RMB capital account convertibility in the future.


    Zhou Xiaochuan said that the future reform of external debt and debt will be accelerated.

    Exchange control

    To further relax the cross-border pactions of other personal capital projects.

    Zhou Xiaochuan also said that the capital market liberalization will focus on further enhancing the level of securities investment convertibility.


    When it comes to strengthening macro Prudential Management in the future, Zhou Xiaochuan said that China will implement dynamic adjustment measures of differential deposit reserve and guide monetary and credit growth moderately.

    In view of systemically important financial institutions, we need to study and formulate higher capital, liquidity and large risk exposure requirements.


    Zhou Xiaochuan pointed out that we should continue to stress the dominant position and role of common stocks and retained earnings in bank capital, raise capital requirements for business products such as asset securitization and derivatives trading, raise the minimum standard of capital adequacy ratio, set up leverage standards, emphasize capital constraints, and strengthen regulatory standards for liquidity risk.


    Zhou Xiaochuan reiterated that this year we should steadily promote the marketization of interest rates and further improve the RMB exchange rate formation mechanism.


    With regard to inflation and monetary policy, Zhou Xiaochuan said that China's economic recovery has been further consolidated and its economic growth momentum is relatively adequate, but at the same time, inflation expectations are increasing and inflation pressures are rising.

    The US and other major economies continue to implement quantitative easing monetary policy, making the international liquidity spillover effect more obvious, further exacerbating the import inflationary pressure.

    The direction of monetary policy from moderate easing to stability is conducive to strengthening the management of inflation expectations, preventing asset price bubbles, and preventing systemic financial risks.


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