Investing.com -- The governor of the People’s Bank of China, Pan Gongsheng, criticized the United States on Friday for its recent use of tariffs, which he claimed is threatening global financial stability. The statement comes amidst moves from both nations seen as efforts to de-escalate their ongoing trade war.
Pan stated that the U.S.’s use of tariffs has seriously violated the legitimate rights of other nations, undermined the rules-based multilateral governance system, and struck a severe blow to the global economic order. He further claimed that these actions have hindered long-term stability and growth of the global economy.
The governor added that the tariff usage has triggered sharp fluctuations in global financial markets, posing challenges to emerging and developing nations, and threatening global financial stability.
Pan emphasized the urgent need for nations to strengthen policy coordination and promote trade liberalization. This statement comes as China exempted some U.S. imports from its steep tariffs, a move seen as a sign that the trade war could be easing between the world’s top two economies. However, Beijing quickly refuted U.S. President Donald Trump’s claim that negotiations were underway.
In his statement, Pan also announced that China’s central bank plans to lower the reserve requirement ratio and policy rate, based on economic and financial developments domestically and internationally, as well as financial market performance. He said, "We will adopt a policy mix to keep liquidity abundant, lower the liability cost of banks, and persistently bring down the overall financing costs for the real economy."
Regarding exchange rates, Pan stated that China will continue to let the market play a decisive role in the formation of the exchange rate, while maintaining exchange rate flexibility. He also pledged to guide expectations and keep the Renminbi (RMB) exchange rate stable at an adaptive and equilibrium level.
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