China Can Withstand Its Stock Market Volatility
International Monetary Fund (IMF) chief Christine Lagarde Wednesday downplayed China’s recent market volatility and said Chinese economy is resilient and the slowdown in growth is under control.
“We believe that the Chinese economy is resilient, and strong enough to withstand that kind of significant variation in the markets,” she said in a press conference.
Ms. Lagarde pointed out, in a medium-term view, China’s the benchmark Shanghai Composite Index is still more than 80% up from one year ago despite the recent correction.
In response to China’s efforts to stabilize the market, the IMF chief said that it’s the Chinese authorities’ duty to prevent disorderly movements in the markets. “The fact that they (Chinese authorities) want to maintain a level of liquidity as well that is commensurate with an orderly process is also quite good,” said Ms. Lagarde.
She said that the market volatility will not derail the IMF’s discussion on whether to include the Renminbi (RMB), or the Yuan, in its SDR (special drawing rights) basket of currencies.
“We are very comforted by that determination (of Chinese authorities) to deliver on the reforms, which will be conducive, one day, when the times comes, once all the signals are checked positively, to the Renminbi being included in the special drawing rights basket,” she said.
By Mu Xueqan
Paul Ebeling, Editor