HKMA’s Yue: Yuan devaluation won’t hurt China’s ‘One Belt, One Road’

Speaking at the South China Morning Post’s (SCMP) China Conference on Friday, Eddie Yue, deputy chief executive of Hong Kong Monetary Authority (HKMA), said that China’s “One Belt, One Road” project will not be hindered by the devaluation of yuan, although the pace of development will be negatively affected.

Key Quotes:

“The One Belt, One Road project is a strategic project of the country. The investment in these infrastructure projects will not be affected by the devaluation,”

“The pace of development may be affected by the short term situation of the market but the long term development goal would not change.”

“The recent depreciation of the yuan against the US dollar is not a fundamental problem of the yuan but it is due the strength of the US dollar. If we compare the yen and euro, the yuan is pretty stable.”

“It is not so bad for the market to expect the two-way movement of the yuan. The offshore yuan deposit is declining and hence reducing the pool of yuan for investment but the hedging tools on the yuan have developed quickly.”