Most PBoC watchers have always believed that the PBoC has been among the most vocal supporters of a stronger currency, and has argued in the past that an appreciating RMB is the best way to fight inflation. Yesterday, however, Zhou Xiaochuan, governor of the PBoC, surprised a number of people at his NPC-related press conference. He said, among other things, that “faster currency appreciation helps to rein in inflation, but not a lot. To curb inflation, we will rely more on domestic policies. There is no need to use exchange-rate reforms as a way to fight inflation.”