CHINA has accumulated the experience and has ample policy tools to cope with forex market fluctuations, State Administration of Foreign Exchange (SAFE) head Pan Gongsheng said.

China has the confidence and capability to keep its foreign exchange market stable and ensure that the yuan trades at a reasonable and equilibrium level, Pan said Sunday in an interview with Financial News, a People’s Bank of China publication, according to a statement on the central bank’s website.

China’s stable economic and financial performance provides strong support to keep the forex market and Chinese currency steady, said Pan, who is also deputy governor of the central bank. China’s forex market is expected to see more capital inflow this year, he added.

The regulator will make counter-cyclical adjustments and step up macro-prudential management as needed, Pan said, without elaborating on the measures. China will stick to its financial reform and opening up policies, and deepen forex management reforms to facilitate cross-border investment and trade, he said.

Since the beginning of this year, China’s forex market has been operating steadily with rising inflow of overseas capital, increasing forex reserves and stable market expectation, he added.

The liberalization and facilitation of cross-border trade will be enhanced while the legitimate rights and interests of overseas investors will be strictly protected to create a more favorable investment environment, he said.

In a similar tone, the central bank said earlier this month that it is fully able to cope with external uncertainties, as it has “rich” policy tools and ample policy room to maneuvre, after the United States raised tariffs.

The central bank said it will “better use” structural policy tools including its targeted medium-term lending facility (TMLF), relending and rediscount to support private and small firms, without elaborating.

At the same time, it will use policy tools to conduct open market operations in a flexible way and guide money market rates within a “reasonable” range, the central bank said.

The central bank said it would look to fine-tune policy according to changes in the country’s economic situation.(SD-Agencies)