China's foreign exchange reserves will not endlessly decrease and will be maintained at an appropriate level, said Yi Gang, vice-governor of the People's Bank of China, on Sunday.
The reserves went
"Such adjustments in corporate and individual balance sheets will not be limitless and after the adjustments, it (foreign exchange reserve level) will be back to normal," he said on the sidelines of the two sessions, the annual meetings of legislators and policy advisors.
Yi said there could be some "extra" capital inflows as China's foreign exchange reserves increased in past years, referring to speculative capital. "It will not be surprising if such capital flows out of China at some point," he said.
The yuan will be basically stable at an appropriate level, he said, adding that there is no basis for sustained yuan depreciation given China's stable growth trend, improving labor productivity, massive current account surpluses, increasing foreign and outbound investment and ample foreign exchange reserves.
Yi also said the central bank will continue to improve the interest rate transmission mechanism and properly guide the market level of interest rate.