LOC18:02
15:02 GMT
TOKYO, July 3 (KUNA) -- The exchange rate of China's currency yuan will remain basically stable at a reasonable and balanced level, official media reported Tuesday.
The People's Bank of China is closely watching the recent fluctuations in the foreign exchange market, China Central Bank Governor Yi Gang said, according to Xinhua News Agency.
The central parity rate of the yuan weakened 340 basis points to 6.6497 against the US dollar Tuesday, hitting a new low since Aug 25, 2017.
Yi said a strengthening US dollar and external uncertainties have given rise to pro-cyclical behavior, which refers to economic change that is correlated positively with the overall state of the economy.
China's economic fundamentals are sound and its financial risks are generally controllable, he said.
"The Chinese economy has entered a phase of high-quality development, with a stable international balance of payment and generally balanced cross-border capital flow," said Yi.
China will use its experience and ample policy tools to maintain the yuan's exchange rate stable at a reasonable and balanced level, the governor added.
Yi also said Beijing will continue to adopt a prudent and neutral monetary policy and deepen the market-oriented reform of the yuan's exchange rate mechanism. (end)
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