(Bloomberg) -- China won’t use its currency as a tool to deal with trade conflicts, central bank Governor Yi Gang said, as a tariff war between the U.S. and the world’s No. 2 economy intensifies.
“China will continue to let the market play a decisive role in the formation of the RMB exchange rate,” Yi said in a statement to the International Monetary and Financial Committee, which was posted on the IMF’s website on Saturday. “We will not engage in competitive devaluation, and will not use the exchange rate as a tool to deal with trade frictions.”
He added China will continue to push ahead with the market-based reforms of its interest rate and exchange rate systems, and keep the currency “broadly stable at an adaptive equilibrium level.”
Monetary policy is expected to remain neutral with more focus on guiding expectations, the governor said. “Proactive adjustment and fine-tuning are needed to ensure that the monetary stance will remain appropriate” amid a changing economic and financial landscape domestically and internationally, he said.
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