Relatively large discrete declines in the renminbi against the dollar and a surge in private-sector investment outflows led to considerable volatility in foreign exchange markets and financial markets more broadly. In response, Chinese authorities boosted the supply of credit, ramped up fiscal stimulus, initiated new communications regarding the exchange rate, and clamped down on capital outflows.
As a result, banks’ exposure to the public sector accounts for less than 17 percent of total assets, vis-à-vis around 50 percent during the crisis. Besides, we took specific measures to prevent those who cannot repay in us dollars from borrowing in that currency, encouraging the development of the credit market in domestic pesos.