China central bank official calls for stepped-up global policy coordination

China, where the coronavirus outbreak originated late last year in the central city of Wuhan, is widely expected to see its economy contract in the first quarter.

A Chinese central bank official called on Sunday for stepped up global policy coordination to manage the economic impact of the coronavirus pandemic, and said Beijing's recent policy measures were gaining traction while it had capacity for further action.

Chen Yulu, a deputy governor at the People's Bank of China (PBOC), also told a news conference that PBOC Governor Yi Gang had exchanged views with U.S. Federal Reserve Chairman Jerome Powell, the International Monetary Fund and other agencies.

China, where the virus outbreak originated late last year in the central city of Wuhan, is widely expected to see its economy contract in the first quarter due to efforts to contain the spread of the disease.

Chen said that while downward pressure on the global economy is increasing, he said he expects significant improvement in the Chinese economy in the second quarter.

While the coronavirus is expected to continue exerting upward pressure on China's consumer prices in the near term, there is no basis for long term inflation or deflation, he said.

Chen also said he expects China's yuan currency to remain stable around 7.0 to the dollar in the near term, due in part to ample foreign exchange reserves.

The country's debt market is stable, with no significant rise in defaults, he said during a briefing where he was joined by other senior Chinese financial regulators.