China News Service, Beijing, November 11 (Xinhua) -- China's monetary policy implementation report for the third quarter of 27 released by the People's Bank of China on the 27th said that it is necessary to resolutely correct the pro-cyclical behavior of the market, resolutely deal with behaviors that disrupt market order, resolutely prevent the risk of exchange rate overshoot, prevent the formation of unilateral consensus expectations and self-reinforcement, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

The "three resolute" expressions added to the above-mentioned report in the next stage of the exchange rate policy demonstrate the central bank's determination to maintain the smooth operation of the foreign exchange market.

Market participants pointed out that recently, the central bank has taken decisive measures to deal with the pressure of periodic depreciation of the exchange rate. While insisting on a domestic foothold and lowering interest rates, the PBOC has also taken comprehensive measures to maintain the basic stability of the RMB exchange rate, not only upholding the decisive role of the market, but also flexibly using the toolbox to curb unilateral expectations.

It should be noted that with the easing of external pressure, the RMB exchange rate has shown a strong head recently. The market expects that the Fed's current round of interest rate hikes has peaked, and the 10-year Treasury interest rate has also fallen below 5.4% from the previous rise above 5%. The easing of external pressures and the recovery of the domestic economy have pushed the RMB exchange rate to rebound significantly, appreciating by more than 11% against the US dollar since November. In the future, there is still a solid foundation for the RMB exchange rate to remain basically stable.

The report also mentions many aspects, such as continuing to deepen the market-oriented reform of interest rates, releasing the dividends of the reform of the loan market prime interest rate, effectively giving full play to the role of the market-oriented adjustment mechanism of deposit interest rates, maintaining the order of the deposit and loan market, and further promoting financial institutions to reduce the actual lending rate; Effectively prevent and resolve financial risks in key areas, guide financial institutions to actively and prudently support the resolution of local debt risks, and maintain the bottom line of preventing systemic financial risks. (ENDS)