US plan to raise interest rates 'will not affect China's exchange rate policy'
Fed’s planned increase won’t affect exchange rate or lead to big capital outflows: officials
A plan by the United States to raise interest rates later this year will not affect China's exchange rate policy or lead to large-scale capital outflows, China's top financial leaders said.
The PBoC has cut interest rates for the third time in the past half year in a bid to lower companies' borrowing costs and stoke a sputtering economy that is headed for its worst year in a quarter of a century.
Zhou said the US considered the RMB exchange rate "unreasonable" just because of its huge trading deficit with China, the website reported. "But China's current account surplus has dropped from 10 per cent of GDP to 2 per cent in recent years, which indicates that China's current account surplus is at a well-balanced level," Zhou said.
Also at the SED, Chinese Finance Minister Lou Jiwei said the US Federal Reserve Chair Janet Yellen's plan to raise rates in 2015 for the first time in nine years would cause many developing countries to lose foreign capital, but the impact would not be "significant" in China.
"China's economy is relatively large. Unlike some countries that rely on short-term capital inflows … China's economic structure is more integrated, and it doesn't fully abandon capital controls," Lou was quoted as saying by Caixin.