PBOC: RMB Exchange Rate Decided by Market

A trade deficit in the first two months this year and its impact on the exchange rate of Renminbi is "a good thing" for China, the governor of China's central bank said Monday.

The supply and demand relations in the market are playing an increasing role in deciding the exchange rate of the Chinese currency, Zhou Xiaochuan, governor of the People's Bank of China (PBOC), said at a press conference on the sidelines of the ongoingannual parliamentary session.

China swung to a trade deficit of US$31.48 billion in February, the largest in a decade, as import growth far outpaced exports.

Yi Gang, vice governor of the PBOC and director of the State Administration of Foreign Exchange (SAFE), also described the trade deficit in February as a "positive sign" for a more balanced international balance of payment for China.