Central bank chief: caution on currency change good for global stability

The video tutorial discusses the flexibility of the RMB exchange rate against major currencies like USD, EUR, and JPY. It highlights the need for a more adaptable exchange rate mechanism to respond to global currency fluctuations. The tutorial also examines global currency trends, particularly the weakening of the USD, and explores historical and international reserve requirement ratios. Finally, it analyzes the necessity of market liquidity adjustments in response to these economic factors.

Why is it important for the Chinese Yuan to have a flexible exchange rate mechanism?

• To reduce inflation

• To increase foreign investments

• To respond to fluctuations in major global currencies

• To stabilize the domestic economy

What was the reserve requirement ratio in China during the late 1990s?

• 6%

• 8%

• 10%

• 4%

How does China's reserve requirement ratio compare to other countries?

• It is higher than most countries

• It is lower than most countries

• It varies significantly from year to year

• It is about the same as most countries

What is a key factor in determining the necessity of adjusting reserve requirements?

• Foreign exchange reserves

• Interest rates

• Market liquidity

• Inflation rates

What is the potential benefit of reducing reserve requirements?

• Boosting foreign investments

• Decreasing inflation

• Increasing market liquidity

• Stabilizing currency exchange rates