Many countries are now concerned about an escalation of the currency war among major exporting economies, especially as China is attempting to devalue its currency to boost its exports, which would throw the global financial market into turmoil, something that the latest G-20 meeting was trying to prevent.
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Mr Zhou said China’s economic fundamentals remained strong and recent data pointed to “positive signs for growth in 2016”.
His co-host, Finance Minister Lou Jiwei, said China will expand its fiscal deficit to support structural reforms to the economy, which slowed to a 6.9 percent growth pace a year ago, the weakest since 1990.
The benchmark Shanghai Composite Index fell 0.45 per cent, or 12.40 points, to 2,754.81 in early deals.
On Friday, on the sidelines of the G20 ministers meeting, PBoC chief Zhou Xiaochuan said China could still use monetary tools to help boost its slowing economy.
The yuan’s drop suggests that China’s central bank is paying more importance to moves against a basket of currencies, according to Oversea-Chinese Banking Corp (OCBC, 華僑銀行).
The decision also preempted the opening this weekend of the annual session of the National People’s Congress, China’s rubber stamp parliament.
NEW YORK (AP) – U.S. stocks started off in neutral as traders weighed corporate earnings and inaction by the world’s leading economic policymakers. Australia’s S&P/ASX 200 was nearly flat at 4947.90.
Research firm Capital Economics predicted one more RRR cut and a couple of cuts to China’s benchmark deposit rate by end of the second quarter.
With the sharp fall Monday, the Shanghai Composite Index is now on track to lose 2.4 per cent for the month, adding to its 23 per cent plunge in January. In the spot market, yuan opened at 6.5470 per dollar and was changing hands at 6.5481 at midday, easing 0.1 percent from the previous close.
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Meanwhile, crude oil prices were seen in positive zone, with the WTI crude trading 0.31% higher at US$ 32.88/bbl and brent crude at US$ 35.52/bbl, up 1.20%. The euro slipped to $1.0918 from $1.0932.
