China central bank says yuan to remain stable, hopes for soft landing in housing market

HONG KONG/SHANGHAI (Reuters) -China’s central bank governor said on Wednesday that the yuan will remain stable against a basket of currencies and expressed hopes for a soft landing in the country’s property market.

Yi Gang, governor of the People’s Bank of China (PBOC), also told a conference in Hong Kong that structural reform will continue to fuel China’s economic growth, and that the country’s reform and opening-up policy will continue.

“I should say that‌‌ the Chinese economy has remained broadly on track despite some challenges and downward pressure,” Yi told the Global Financial Leaders’ Investment Summit.

“The Chinese economy has proved to be quite resilient … and inflation remains subdued.”

China’s accommodative monetary policy played a role in supporting stable economic growth, and the central bank will use structural policies to prop up key areas such as agriculture, green development and smaller companies, he added.

Although the yuan has weakened against the dollar this year, it has appreciated against other major currencies, and will remain relatively stable against a basket of currencies, with the exchange rate mainly determined by the market, Yi said.

Regarding the property market, which is suffering from a prolonged debt crisis, Yi said local governments play an essential role in promoting its healthy development.

China’s housing sector is linked to a lot of upstream‌‌ and the downstream industries, and “we hope‌‌ the housing market‌‌ can achieve a soft landing‌‌,” he said.

The central banker also said that China will continue to improve business environment, protect property rights, promising that “reform and open-door policy will continue‌‌.”

Hong Kong has shown remarkable resilience, and “has a great potential in deepening connections with the mainland financial market,” Yi said.

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