China pledges yuan stability
(chinadaily.com.cn)
Updated: 2004-03-11 11:49

The People's Bank of China, the country's central bank, reiterates on Thursday its long-standing position on Renminbi, saying the yuan exchange rate will be kept stable at a reasonable level.

"We will steadily push ahead with the convertibility of the yuan under the capital account, further develop the foreign exchange market, improve the mechanism for determining the yuan exchange rate and keep the exchange rate basically stable at a balanced level," the bank said in a statement.

The statement was issued ahead of a joint news conference by the central bank Governor Zhou Xiaochuan and the banking regulator Liu Mingkang of the China Banking Regulatory Commission (CBRC) on the sidelines of an annual session of the National People's Congress.

The yuan is pegged around 8.28 to the U.S. dollar.

NPL ratio down

According to the background materials provided by the CBRC at the press conference, China's major banking institutions slashed the ratio of non-performing loans (NPLs) by 5.32 percentage points to 17.8 percent last year.

In 2003, total NPL volume of major Chinese financial institutions was cut off by 190.6 billion yuan (US$23.1 billion) to 2.44 trillion yuan (US$295 billion) at the year's end, it said. 

The figures demonstrate China's enhanced ability to weather financial risks and supervise its banking institutions, the CBRC said.

The CBRC punished 1,242 banking institutions at different levels and penalized 3,251 bank staffs who violated financial regulations in the past year. The financial "watchdog" also strengthened its off-site surveillance function, and monitored economic and financial development so as to promptly identify and signal potential risks, according to the material.

It also said that China has stepped up efforts on combating currency counterfeit in the past year, confiscating 656 million yuan and US$5.05 million in counterfeit notes.

Meanwhile, banknote management was strengthened and a total of 9,007 financial institutions were found violating cash management regulations last year, it added.