Bloomberg News:
What is the central bank's take on the renminbi's exchange rate? In the second half of last year, the renminbi exchange rate appreciated significantly against the U.S. dollar. Is there any concern that this trend will have some negative impact on exporters and the real economy? Moreover, what is the progress of Ant Group's rectification? Will it be required to break off some of its business? Thank you.
Chen Yulu:
Thank you for the two questions, both of which are issues that many are concerned about. First, I would like to invite Mr. Sun to answer your question regarding the exchange rate.
Sun Guofeng:
By the end of 2020, the exchange rate of the renminbi against the U.S. dollar had appreciated by 6.9% compared with the end of the previous year. The fluctuation range has not exceeded a historic level, such as those encountered in 2007 and 2008. The renminbi had appreciated by about 4% against a basket of currencies, with moderate annual volatility. The average exchange rate against the U.S. dollar for the whole year was 6.90 yuan, the same level as 2019. On the whole, the renminbi exchange rate remains basically stable at a reasonable level, which is in line with China's foreign trade and the fundamentals of its economy. Compared with other major currencies, the renminbi's appreciation against the dollar has also been moderate. Under the new system of a higher-level and open economy, the renminbi exchange rate is at a reasonable and equal level and the positive and negative impacts of exchange rate fluctuations on exports and the economy have been basically offset. The future trend of the renminbi exchange rate will depend on the domestic and foreign economic situation, international balance of payments, and changes in the international foreign exchange market. In general, the renminbi exchange rate will both rise and fall and the two-way floating of the renminbi will become normal. It will neither keep appreciating nor depreciating but will remain basically stable at a reasonable and equilibrium level. Thank you.
Chen Yulu:
Regarding the second question, Ant Group has set up a working group to rectify its business practices under the supervision of financial watchdogs. It is busy making a timetable for readjusting its business according to regulatory requirements. Moreover, it should maintain its business as usual and ensure the quality of financial services provided to the public. Financial regulators are maintaining close communication with Ant Group and more information and progress about the work will be updated. Thank you.
