Chinese regulators, including the central bank, will crack down on manipulation of the foreign exchange market, according to a statement released Thursday on the central bank’s website.
Regulators said the current forex market is broadly balanced and the yuan may move in either direction in the future.
They did not reiterate any changes in the country’s monetary policy, which is a managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies.
Monetary policy is “adapted to China’s national conditions and should be adhered to in the long run,” the statement said.
The yuan exchange rate cannot be used as a tool to boost exports or offset the impact of soaring commodity prices, and fluctuations are normal, he said.
The official remarks came after the onshore yuan rose to a new three-year high against the dollar on Thursday. Investors increased their bets on further strength in Chinese unity after China’s central bank appeared to show no discomfort with recent gains.
Domestic markets have been hotly debating in recent weeks whether China should allow further strength in its currency to offset rising commodity prices.
The People’s Bank of China (PBOC) had previously said over the weekend that two-way fluctuations would become the norm for the Chinese currency, after comments from central bank researchers baffled the market.
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