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China central bank chief sees yuan as global currency by 2020 on deepening reforms

Tuesday, November 10, 2015 - 11:09
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Zhou Xiaochuan, governor of the People's Bank of China (PBOC), attends a news conference in Beijing, China, on Thursday, Mar 12, 2015.

[SHANGHAI] China will deliver a slew of economic and financial reforms over the next five years, which will help the yuan become an international currency by 2020, central bank governor Zhou Xiaochuan said in an article.

The reforms will also include improving central bank communications and guiding market expectations to enhance monetary policy, Mr Zhou wrote in the Caixin article published on the magazine's website.

Mr Zhou said the government will strengthen supervision of its financial system to prevent "systemic risk", explaining China's proposed 13th Five-Year economic plan for the years 2016 to 2020.

The comments around policy priorities come amid growing doubts in global markets about China's commitment to see through comprehensive financial reforms.

Those doubts were sparked after Beijing intervened in the stock markets during a share price rout that started in June and saw the main Shanghai Composite Index plunge as much as 40 per cent.

Beijing has also intervened in its currency market after an abrupt devaluation by the central bank in August caused widespread worries over the yuan's future value.

Mr Zhou said China will foster new mechanisms to promote financial liberalisation and development, as well as "enhance the efficiency of the financial system to serve the real economy." "It will effectively use and develop financial risk control tools, and reduce levels of leverage so as to prevent systemic risk," he said.

Mr Zhou pledged to improve central bank communications on policy intentions, but didn't offer details on whether policy makers will provide routine briefings to accompany rate announcements similar to other developed economies.

REUTERS\