China's market-guiding body made up of officials from the central bank on Friday stressed the importance of curbing extreme exchange rate fluctuations of the yuan, after the currency weakened past 7 per U.S. dollar on Wednesday for the first time this year.
The China Foreign Exchange Committee (CFXC), a mechanism made up of regulators from the People's Bank of China and the State Administration of Foreign Exchange as well as industry participants to provide guidance on the forex market, said it was vital to actively maintain the basic stability of the forex market and suppress extreme fluctuations.
At its first meeting this year, the CFXC members said the country's macroeconomy provides a solid foundation for the stable operation of the forex market.
The committee highlighted that China's market-oriented forex market continued to advance, and that it possesses the ability to correct itself and keep the Chinese currency at a stable and reasonable level.
They pointed out that the two-way fluctuation of the yuan has been more apparent recently, given a mixture of high-interest rates as well as global banking risks that are fueling risk aversion appetite in the market and pushing up the U.S. dollar in the short term.
Meanwhile, China's regulators will continue to strengthen supervision and, if necessary, make corrections to the pro-cyclical behavior and curb speculation, members of the committee added.