China's central bank official says yuan at appropriate level
BEIJING China's yuan is at an appropriate level and two-way fluctuations in the currency will not necessarily cause disorderly capital flows, a senior official at the People's Bank of China told Reuters yesterday.
The yuan has weakened nearly 2.4 per cent since US President Donald Trump threatened this month to impose more tariffs on Chinese goods from Sept 1.
"The current level of RMB (renminbi) exchange rate is appropriately aligned with fundamentals of China's economy and market supply and demand," Ms Zhu Jun, head of the central bank's international department, said.
She said China was "shocked" by the US Treasury Department's move last week to label China a currency manipulator, hours after Beijing let the yuan drop through a key support level to its lowest point in more than a decade.
But Ms Zhu said China will be able to "navigate all scenarios". In the short run, external shocks will play a role by influencing the yuan's movements.
"That said, as long as RMB moves in an orderly manner based on market supply and demand, such movements in either direction do not necessarily mean disorderly movement of capital flow," she said.
The yuan will be supported by China's solid economic fundamentals, a stable debt ratio, contained financial risks, adequate foreign exchange reserves and favourable interest rate spreads between China and major advanced economies, she said.
"Over the medium and long term, we have full confidence in RMB as a strong currency."
- REUTERS
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