CHINA said Friday it will maintain yuan flexibility and foreign exchange market stability, vowing to actively prevent and defuse risks from external shocks.

The trend of foreigners investing in China and allocating yuan assets will not change, China’s foreign exchange regulator said. Meanwhile, China expects a reasonable current account surplus this year, despite an expected slowdown in exports.

The growing policy divergence between a hawkish U.S. Federal Reserve and a dovish People’s Bank of China could lead to money outflows.

The State Administration of Foreign Exchange (SAFE) said Friday it will strengthen macro-prudential management of cross-border capital flows and ward off risks of external shocks.

China will continue to maintain yuan flexibility, step up monitoring cross-border capital flows, enrich the policy toolbox and appropriately guide expectations, it said.

“China’s financial market is increasingly open, and Chinese bonds and stocks have sound investment value,” the SAFE said.

“There’s still big room for foreign investors to increase allocation [to China assets], which is good for long-term, steady capital inflows.”

In terms of current account, China’s export growth may slow from a high base. (SD-Agencies)