Inflation rate in China is still higher than the government’s comfort ability structure and thus the Central Bank Governor said on Saturday that China's monetary policy tightening will continue for some more time. Also the governor explained that they will be using Yuan as one of the tools to fight the situation.

Zhou Xiaochuan, Head of the People's Bank of China, marked that China will be using the Yuan to fight the inflation situation in the country and will try to make the currency more flexible over time. He said in his statement that "The shift from a moderately loose monetary stance to a prudent one means tightening, and this stance will continue for a while".

Zhou brought into notice the 4.5% rise in Yuan against the dollar since the end of a de facto peg last June, which has also fallen by 4.3% since that time against a trade-weighted basket on account of dollar weakness, according to the data from the Bank for International Settlements.

Zhou also confirmed that since China has not arranged for any pre-set targets for the Yuan's value thus Beijing has been assigned the role of market demand and supply in deciding the Yuan's exchange rate.