MNI BRIEF: Limited UST Impact, Yuan Remains Stable: PBOC's Zou

Recent U.S treasury and dollar exchange-rate volatility has had a limited impact on China’s FX reserves, and the People’s Bank of China will continue to ensure yuan stablility against external shocks, PBOC Deputy Governor Zou Lan told reporters on Monday in a briefing. 

China's diverse foreign exchange reserves have limited the impact of fluctuations in any “single-market or single-asset exposures," said Zou, accusing the U.S.'s tariffs of disrupting the global economic order and triggering global asset portfolios to undergo cross-regional reallocation.

China’s foreign exchange market has remained resilient and the yuan has hovered around 7.3 against the U.S. dollar, reflecting orderly market dynamics, he pointed out, noting solid economic fundamentals, balanced international payments and the above USD3.2 trillion of FX reserves buffer will support a stable currency. 

The PBOC will further take measures to strengthen FX market resilience and prevent overshooting of the yuan, including correcting pro-cyclical behaviors and cracking down on market-disruptive activities, he warned.