MNI China Press Digest May 19: Yuan, PBOC, Currencies

MNI (BEIJING) - Highlights from Chinese press reports on Monday:

• The yuan is unlikely to see sharp appreciation against the U.S. dollar in the near term, as the market monitors China-U.S. trade talks, while the greenback may show resilience before an expected interest-rate cut between September and December, Yicai.com reported citing analysts. The variable of the countercyclical factor in the central parity rate has been -200 points in recent days, far from the previous range of nearly -1,000 points, which signals less desire for the People’s Bank of China to promote yuan appreciation amid ongoing export challenges, the newspaper said citing an unnamed forex trader. The central parity could be further lowered to 7.17-7.18, compared with 7.1938 set last Friday, the newspaper added.
• China must accelerate reforms to improve the resilience of its financial system amid internal and external pressures, said Ding Zhijie, director at the Financial Research Institute of the People's Bank of China. The priority is to maintain a stable financial environment by improving the multi-level capital market and supporting the entry of medium- and long-term funds. It is also necessary to accelerate the improvement of the central bank system and smooth the monetary policy transmission mechanism, while focusing on promoting high-level financial opening-up, said Ding. (Source: 21st Century Business Herald)
• More currencies especially those of emerging market countries will join the ranks of international currencies, with the use not limited to trade and investment but also serving financial stability, said Hu Xiaolian, former chair of the Export-Import Bank of China. It is also important to keep an eye on whether encrypted digital currency will become a public product serving international cross-border trade and investment in future, said Hu. (Source: 21st Century Business Herald)