Lu Lei, deputy head of the State Administration of Foreign Exchange (SAFE) urged developed countries to ensure ‘more effective’ monetary coordination in order to create a “fairer” international environment.

Key takeaways

“Countries lying at the core of the international monetary system often have a big say.”

“Powell’s speech indicated the Fed will accelerate its tightening, and global liquidity may face a major test.”

“Given the deep interconnection of financial markets, it could accelerate cross-border [risk] contagion.”

“We should make the monetary policy consultation mechanism more effective. Particularly, we should pay attention to the policy spillovers in major developed economies, to gain a fairer and just international environment for emerging markets and developing countries.”

Market reaction

USD/CNY is trading at 6.3683, down 0.11% on the day, as the yuan remains undeterred by the PBOC’s RRR cut chatters.