China's Li won't allow 'rollercoaster' markets after Brexit

Tue Jun 28, 2016 6:19am EDT
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By Elias Glenn

BEIJING (Reuters) - Chinese Premier Li Keqiang said on Tuesday he wouldn't allow the post-Brexit panic that roiled global currencies and stocks to send the country's financial markets into a tailspin, an indication authorities would intervene if needed to prevent market chaos.

"It's hard to avoid short-term volatility in China's capital markets, but we won't allow rollercoaster rides and drastic changes in the capital markets," said Li, speaking at the World Economic Forum (WEF) in the city of Tianjin.

"It's important for all of us to work together to strengthen confidence, prevent the spread of panic, and to maintain the stability of capital markets."

The assurance came as the post-Brexit turmoil that swept global markets and sent the pound sterling to a three-decade low last week abated.

China's financial markets were subject to wild downturns in 2015 and early 2016 as regulators struggled to manage speculative investment and amid wider concerns about the economy.

However, some calm has returned to stock and currency markets after heavy intervention by authorities since then.

The yuan slumped to its weakest level against the dollar since December 2010 on Monday, but recovered slightly on Tuesday and equity markets have risen this week.

China's strict capital controls have helped shield Chinese stocks from the worst of the global market turmoil, which was triggered by Thursday's the Brexit vote, although confidence remains shaky.   Continued...

China's Premier Li Keqiang delivers a speech at the First World Conference on Tourism for Development at the Great Hall of the People in Beijing, China, May 19, 2016. REUTERS/Jason Lee