Good to hear, but isn't this what they always say in these circumstances?
China’s central bank governor downplayed concerns over China’s falling foreign reserves and said he saw no basis for continuing depreciation in the renminbi — comments that could calm mainland markets when they reopen on Monday after a week-long hiatus that saw upheaval in global markets... Local analysts welcomed Mr Zhou's decision to speak up, after several months of relative silence on currency policy. "Many have criticised China for a depreciating renminbi and a lack of transparency in communication," said Shao Yu, chief economist at Orient Securities in Shanghai.
PBoC governor downplays forex fears
Still useful he spoke out, and he does have some points though:
In the interview, Mr Zhou dismissed speculation that Beijing would tighten capital controls... Mr Zhou stressed that Beijing's strategy did not include further devaluations to boost exports. "The total trade surplus in 2015 was close to $600bn and net export's contribution to gdp was not low so there's no motive to depreciate the renminbi for the sake of net export expansion," he told Caixin. He condemned "speculators" for targeting the renminbi, adding that "China will not let market sentiment be dominated by these speculative forces". Mr Zhou reiterated that "the trend is to rely further on the market to decide the level of the currency and to achieve a more flexible foreign exchange rate". "The bank will use a basket of currencies as a reference and appropriately manage any daily volatility in the renminbi against the dollar as well as using a wider range of economic data," he said, adding that there "is no basis for devaluation".
PBoC governor downplays forex fears
And we think the latter is especially helpful. A big economy like China shouldn't have a fixed exchange rate (neither the US dollar, the euro, the yen are fixed, although some of them might receive some form of indirect managing from time to time).
As the eurozone learned the hard way, flexible exchange rates can be very useful shock absorbers..