China to keep yuan stable in global monetary system

An employee at a bank counter counts renminbi. [Photo: Chinanews.com]

China will continue market-oriented reform in the RMB exchange rate mechanism and maintain the currency's stable position in the global monetary system in 2017, according to the government work report delivered on Sunday at the annual parliamentary session.

The Chinese currency weakened around 6.8 percent against the U.S. dollar last year as U.S. economic recovery and expectations for more interest rate hikes prodded the dollar higher. But the RMB remained relatively stable against a basket of other currencies.

The government work report said the yuan remained generally stable at an "adaptive and equilibrium level" last year.

Analysts believed despite short-term volatility from a stronger dollar, the yuan will maintain overall stability and the chance for a sharp depreciation is slim, backed by stable Chinese economic growth, balanced fiscal condition and ample foreign exchange reserves.

China's forex reserves dipped to about 2.998 trillion U.S. dollars in January, down from about 3.01 trillion U.S. dollars in December 2016, representing the seventh consecutive monthly contraction that raised worries over the speed of declines.

Pan Gongsheng, deputy governor of China's central bank, dismissed such concerns on Saturday.

"China's forex reserves are more than sufficient, either by internationally accepted traditional standards or the latest standards worked out by scholars," said Pan on the sidelines of the annual session of the Chinese People's Political Consultative Conference (CPPCC) National Committee.