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Pan Gongsheng: Sustainable investment will be a long-term goal for foreign exchange reserves management
June 11,2021

  Pan Gongsheng, Deputy Governor of the People's Bank of China and head of the State Administration of Foreign Exchange, attended the opening ceremony and the plenary session one of the 13th Lujiazui Forum and delivered a keynote speech on the latest development of China's foreign exchange market.

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  First, with the RMB exchange rate moving in both directions,the foreign exchange market has been running smoothly. China's current account surplus remainswithin a reasonable range. We see a general supply and demand balance in the foreign exchange market and steady growth of our foreign exchange reserves.

  Second, market players should adapt to the two-way movement in the exchange rate and develop a risk-neutral philosophy in managing their foreign exchange exposure. China has already formed a foreign exchange derivatives market with considerable depth and breadth, which boastsbroad product offerings, such as forwards, foreign exchange swaps, currency swaps and options, and diversified market players.

  Third, reform of foreign exchange management will proceed steadily, and cross-border trade and investment liberalization and facilitation will be further promoted.The reform and opening up of foreign exchange regime will focus on six priority areas including expanding product offerings and increasing the number of domestic and foreign players in the foreign exchange market. In the near future, some pilot programs of foreign exchange management with a higher level of openness will be introduced in some areas including Lin’gang Special Area of China (Shanghai) Pilot Free Trade Zone.

  Fourth, efforts will be made to better manage foreign exchange reserves and develop world-class asset management institutions. In the future, on the basis of maintaining the safety and liquidity of foreign exchange assets as well aspreserving and increasing their value, achieving sustainable investment will be a long-term goal for foreign exchange reserves management.