China will work with Asian countries to explore strengthening the regional financial safety net and improve the effectiveness of the Chiang Mai Initiative (CMI), according to Pan Gongsheng, governor of the People’s Bank of China.

Pan said Asian nations can together advocate for reforms to the IMF quota system that does not effectively reflect the relative positions of member countries in the global economy.

“Beijing's bilateral currency swaps constitute an important part of the international relief efforts led by the IMF and the central bank will further deepen currency cooperation with Asian economies, and contribute to maintaining regional financial stability,” Pan noted.

Weak sentiment, U.S dollar strength and the People’s Bank of China’s continued support for the yuan, unless other currencies extend their weakness, will keep volatility elevated and the central bank on guard over Q2, traders and advisors told MNI. (See MNI: More Yuan Volatility Ahead, PBOC Vigilant)