June 18, 2019 / 3:00 PM / 4 months ago

China PBOC's Chen: markets to play a more 'decisive role' in exchange rate

FILE PHOTO: Vice governor of the People's Bank of China Chen Yulu attends a thematic forum of the second Belt and Road Forum for international cooperation in Beijing, China, April 25, 2019. REUTERS/Jason Lee/File Photo

LONDON (Reuters) - China will let markets play a more prominent role in deciding the exchange rate for its yuan currency, the central bank’s vice governor Chen Yulu said on Tuesday.

“We will improve the market based exchange rate formation and transmission mechanism, we aim to let the market play a more decisive role in determining exchange rate,” Chen said during an event at Bloomberg in London.

China has taken big strides in trying to promote the international usage of its currency since 2009 but the yuan’s take up in global trade and markets remains meagre thanks to its relatively closed markets and largely policy determined exchange rate.

Chen also added that policy makers in the world’s second largest economy would push ahead with efforts to make yuan-denominated assets more attractive to investors outside China and focus on opening its financial sector.

“Going forward, China will pursue high standards in improving the financial sector: We will improve the business standard and improve the policy climate to further improve the attractiveness of RMB assets.”

Reporting by Karin Strohecker and Saikat Chatterjee

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