China names central bank deputy governor as new forex boss 

China’s cabinet has named Pan Gongsheng, a deputy governor of the country’s central bank, as its new top foreign exchange regulator to manage the country’s currency reserves and steer yuan reforms.

Pan will replace Yi Gang as head of China’s State Administration of Foreign Exchange (SAFE), the cabinet said on Tuesday. Chinese business magazine Caixin first reported the news last month.

Analysts don’t expect the appointment will have a significant impact on China’s foreign exchange policy, which is overseen by the central bank. SAFE is officially an arm of the People’s Bank of China.

His appointment comes as authorities struggle to stem capital outflows – fanned partly by fears of China’s economic slowdown – that have put pressure on the yuan CNY=CFXS.

“Pan’s appointment shouldn’t have too much of an impact because SAFE is more a management body rather than a decision-making body,” said Zhou Hao, senior emerging markets economist for Asia at Commerzbank AG, adding SAFE’s purview is focused on managing capital inflows and outflows, selling and buying FX, bank regulation and management of FX reserves.

“The power to make decisions is much more in the hands of the People’s Bank of China or even higher organizations.”

Unlike Western central banks, the PBOC does not have the final word on adjusting interest rates or the value of the yuan. The basic course of monetary and currency policy is set by the cabinet, or by the Communist Party’s ruling Politburo.

Pan, 52, previously held roles at Agricultural Bank of China Ltd (601288.SS) and Industrial & Commercial Bank of China Ltd (601398.SS), the country’s largest lender, before taking his position at the People’s Bank of China, according to his biography posted on the central bank’s website.

Pan has a Ph.D. in economics from China’s Renmin University.

Yi, a renowned economist who has a PhD from the University of Illinois, was named the top forex regulator in 2009. He will remain a deputy governor of the central bank as well as vice minister of the Office of the Central Leading Group on Financial and Economic Affairs.

China’s foreign exchange reserves, the world’s largest, posted their biggest annual drop on record in 2015, adding to worries about growing capital outflows that are dragging its yuan currency to multi-year lows and mauling global financial markets.

Source: REUTERS – China names central bank deputy governor as new forex boss

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