The interest rate gap between China and the US will not necessarily have a major impact on the exchange rate of the yuan, said Zhou Xiaochuan, governor of the central bank, on Friday.
Interest rate gap is a factor that drives short-term international capital flows, but in the middle term, a country's economic fundamentals, such as growth rate, investor confidence, and inflation level, determine the direction of cross-border capital flows, he told a news conference during the ongoing legislative and political advisory sessions.
He cited the case of Japan, which has ultra-low interest rates for years.
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