The People's Bank of China (PBoC) Governor, Pan Gongsheng, emphasized the importance of a stable yuan for global financial stability during a recent conference in Saudi Arabia. Despite market volatility and the strengthening US dollar, the Chinese currency has maintained its stability. Additionally, Pan highlighted the country's focus on promoting domestic consumption and implementing supportive economic policies.

Stabilizing the Yuan Amidst Global Market Volatility

Pan Gongsheng underscored that while many non-dollar currencies have weakened against the US dollar, the Chinese yuan has demonstrated remarkable resilience. This stability is attributed to China's commitment to allowing market forces to influence exchange rates. The central bank governor stressed the significance of maintaining this stability for international financial markets.

During his address at the AlUla Conference for Emerging Market Economies, Pan explained that various factors have contributed to the rise of the US dollar index. However, despite these challenges, the yuan has remained largely unaffected by the heightened market volatility. This stability reflects China's dedication to fostering a robust and reliable financial environment, which plays a crucial role in global economic stability. Furthermore, Pan assured that China will continue to prioritize market-driven mechanisms in determining exchange rates, reinforcing confidence in the yuan.

Boosting Domestic Consumption and Economic Policies

Pan also addressed China's strategic shift towards enhancing domestic consumption as a key driver of economic growth. Recognizing the need to reduce reliance on investment and address potential export challenges, the country is implementing pro-consumption measures. These include initiatives aimed at increasing household income and providing subsidies to stimulate consumer spending.

Emphasizing the government's proactive approach, Pan outlined plans to adopt an accommodative monetary policy alongside a proactive fiscal strategy. By strengthening counter-cyclical adjustments, China aims to mitigate economic fluctuations and foster sustainable growth. The central bank governor reiterated that boosting consumption remains a top priority for 2025, signaling a significant shift in the country's economic strategy. This move not only supports domestic demand but also enhances China's resilience in the face of external economic uncertainties.