China has selected American-trained economist Yi Gang to become the country’s new central bank governor, the Wall Street Journal (WSJ) reported on Sunday, citing unnamed people with knowledge of the matter.
The WSJ said the nomination of Yi, who is currently deputy to incumbent central bank governor Zhou Xiaochuan, was reviewed by the nearly 3,000 delegates attending the National People’s Congress on Sunday afternoon.
It said his appointment to the top post at the People’s Bank of China (PBOC) was set to be approved when the legislature reconvenes on Monday morning.
Zhou’s successor will have a weighty first assignment.
The US Federal Reserve is expected to announce a decision to raise interest rates on March 21, a day after China’s parliament ends.
In 2017, the Fed raised borrowing costs three times and the PBOC followed it twice – in March and December – setting open market operations’ (OMO) rates higher by 10 basis points (bps) and 5 bps, respectively.
Some economists see no need for China to increase rates this month because Beijing’s deleveraging campaign has already tightened financial conditions.
“If (Yi’s appointment is) true this could ease market concerns about the possibility that a personnel change might lead to an incremental tightening of policy, as Yi has been the deputy governor in charge of monetary policy,” Goldman Sachs wrote in a note.
Zhou, the country’s longest-serving central bank head, said in October that he was likely to retire soon and sources with ties to the leadership had told Reuters that he was likely to do so around the time of the annual session of parliament.
Yi, 60, has been a PBOC vice governor since 2008.
Yi, one of the highest-ranking “sea turtles” – a colloquialism for Chinese returning from overseas – has a PhD in economics from the University of Illinois.