CHINA will not opt for unrestricted capital account opening even as it gradually makes the yuan convertible over a long period, the central bank governor emphasized yesterday.
"We are not saying we will have 100 percent convertibility or no supervision from the regulator," Zhou Xiaochuan, the People's Bank of China governor, told a forum in Sanya in Hainan Province.
"It is wrong to view capital account opening as equal to the practice of a fully convertible currency, total freedom of cross-border fund transfer and zero supervision," Zhou stressed.
He said the country will still monitor and restrict capital flows in some sensitive areas, such as fending off speculative funds or in combating a financial crisis.
Zhou said the PBOC expects to achieve "basic" yuan convertibility by 2015, adding "China has already made the yuan virtually or partially convertible on capital account transactions."
SOURCE: Shanghai Daily
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