BEIJING (Reuters) - China’s policymakers are closely watching market changes and capital flows, vice Finance Minister Zhu Guangyao was quoted as saying on Saturday.
Zhu said that China will “unswervingly” push forward reforms including the internationalisation of the yuan, but it will also keep a close eye on market changes and capital flows, state-owned China News Service reported on Saturday.
Zhu said he “basically agrees” with market forecasts that the U.S. central bank will tighten monetary policy at its meeting in December by raising rates by 0.25 percent, which would mean heightened capital outflows for all markets, including China.
But he stressed the yuan is appreciating against a basket of currencies despite its fall against the U.S dollar, and it’s still the second strongest currency after the dollar.
The yuan has fallen to eight-and-a-half year lows against the dollar in recent weeks, threatening a surge in capital outflows. Its outlook is further clouded by the potential December U.S. rate hike.
Zhu made the comments on Friday during an interview with China News Service in Berlin, in response to questions on whether China is tightening overseas investment to curb capital outflows.
Reporting by Yawen Chen and Kevin Yao; Editing by Richard Pullin