Pushing forward RMB convertibility - UOB

Analysts at UOB Group explained that in a panel discussion at the Boao Forum for Asia (BFA) Annual Conference on Wed, PBoC Governor Yi Gang said that China’s market-determined exchange rate mechanism has been working well and will continue to work well and reassured that China is steadily pushing forward RMB convertibility. 

Key Quotes:

"The monetary policy stance will remain prudent and is focusing on the domestic macroeconomic situation. He said the interest rate differential with US currently looks generally stable. China’s deposit and lending rates will become more market-determined."

"On the trade issues, Yi Gang said that US’s trade imbalance is a structural problem, and its declining saving rate makes reducing trade deficit difficult. However, he also highlighted that China’s service trade deficit with the US is growing rapidly. Yi Gang’s comments signal continuity in China’s monetary policy and that the CNY exchange rate will not be used as a tool in the trade tensions with US."