China should stop yuan intervention, says ex-PBOC adviser, Latest Business News - The New Paper

China should stop yuan intervention, says ex-PBOC adviser

This article is more than 12 months old

BEIJING: China's central bank should set a "bottom line" of 25 per cent for the yuan to depreciate and stop intervening to help preserve foreign exchange reserves, Mr Yu Yongding, a former central bank adviser, was quoted as saying by financial magazine Caixin yesterday.

The influential economist has been an advocate of a freer float for the yuan, which the central bank currently allows to fluctuate 2 per cent either side of the midpoint it sets before markets open each day.

Mr Yu's comments follow a bout of sustained pressure from capital outflows that resulted in the yuan losing 6.5 per cent against the US dollar last year.

Despite recovering about 0.5 per cent this month, the yuan was still hovering at 6.9130 per US dollar early yesterday.