"If a central bank has multiple objectives, it may be harder to be immune from the political reality," he said. Which means that the exchange rate must be more flexible, and the convenience and flow of current account, capital account money can be more free. "But Zhou said the central bank's independence was sometimes under pressure due to its multiple objectives that create "tensions" with other government agencies. Zhou has also pledged to avoid devaluations to gain a trade advantage.Zhou said yuan exchange rate policy should serve China's "overall development strategy," including its transition to a market economy.He added that it was important that "the exchange rate policy is meeting the higher requirement of the market economy. These include maintaining growth and price stability, maintaining the balance of payments, reforming the banking sector and developing financial markets.

Source: Economic Times June 25, 2016 09:16 UTC