China relies on capital controls to manage its exchange rate, Gita Gopinath notes

China relies on capital controls to manage its exchange rate, Gita Gopinath notes
China capital controls and currency actions

Gita Gopinath, first deputy managing director at IMF, addressed the topic of China’s exchange rate policy. She stated that while China uses capital controls and state-owned banks are increasingly involved in intermediate external surpluses, there is currently no consistent evidence of one-sided currency manipulation.

Gopinath has previously highlighted that economic imbalances often reflect underlying macro policy choices, stressing the importance of addressing policy gaps in her commentary on growth strategies. She has also echoed calls to reassess central bank communication, noting concerns about Federal Reserve forward guidance during the pandemic in a separate review. These remarks add context to her recent assessment of China’s currency practices.

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