The People's Bank of China (PBC) on Oct. 8 released PBC's View on the RMB Exchange Rate, reaffirming China's commitment to advancing the market-oriented reform of the RMB exchange rate regime.

The country's central bank emphasized in the statement that China adopts a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Market forces play a decisive role in determining the RMB exchange rate.

The PBC stated that the market-oriented reform of the RMB exchange rate regime is an important part of China's efforts to build a socialist market economy, and the country has a firm and consistent commitment to advancing the reform.

The RMB exchange rate has floated in both directions over the past two decades. It has experienced several cycles of appreciation and depreciation since 2010, with more pronounced two-way floating and greater flexibility. Statistics show that the RMB against the U.S. dollar has gone through three appreciation cycles and three depreciation cycles, generally fluctuating within a wide range of 6.04 yuan to 7.35 yuan per U.S. dollar. The RMB exchange rate fluctuated by more than 10% during each cycle of appreciation and depreciation.

"China has no need or intent to gain competitive advantages through currency devaluation, nor has it ever resorted to competitive devaluation," the central bank said, adding that China's trade growth is driven by its growing industrial competitiveness in the global market.

The PBC noted that China is a responsible country, and has never resorted to competitive currency devaluation or RMB depreciation to boost exports to offset intensive external shocks in the past.

In recent years, while most non-U.S. dollar currencies were under considerable depreciation pressure as a result of trade war and in response to aggressive rate hikes by the U.S. Federal Reserve, the PBC has made great efforts to prevent the RMB from excessive depreciation by adopting a host of macroprudential measures.

More broadly, exchange rate dynamics are driven by a number of factors including economic growth, monetary policy, financial markets, geopolitics and sudden shocks, the PBC said, noting that there is no straightforward relationship between exchange rate and current account.

The central bank said that addressing global imbalances requires collective action from all stakeholders, as global economic imbalances are deeply intertwined with the shifting global division of labor, inherent flaws in the international monetary system, and persistently high fiscal deficits and high consumption in some countries.

"Attributing one's decline in industrial competitiveness, weakened fiscal discipline and complicated structural issues simply to others' exchange rates is nothing but shifting the responsibility for adjustment onto others and dodging accountability," the bank said.

China has long been a contributor to global economic rebalancing, the PBC said. During the 15th Five-Year Plan period (2026-2030), China will stay the course in transforming its economic growth model, expand domestic demand, improve the business environment, deepen high-standard opening up, and pursue a more open, inclusive and balanced global economy, according to the PBC statement.