PBOC Adviser Huang: Let the market ‘truly’ decide Yuan rate

The Chinese central bank’s PBOC, adviser Huang Yiping was on the wires via Bloomberg last hour, noting that the market should be allowed to "truly" decide the Yuan’s central parity rate as authorities continue reforms of currency policy.

Key Quotes:

"A more flexible floating exchange-rate regime can be expected in the coming years," Huang said in a written exchange with Bloomberg News. Following reforms last year of the yuan’s pricing mechanism, the currency’s flexibility has improved apparently without triggering any instability in global markets”

“Improving the floating rate yuan regime would require innovation, such as more hedging products to help market players smooth volatility" 

"The large amount of foreign reserves can be a strong backup"

“The ability to accept greater volatility is necessary for a country moving toward opening up"