FXStreet (Mumbai) – There is no need to worry about yuan depreciation after its inclusion into the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs) basket of currencies, PBOC Vice Governor and head of the State Administration of Foreign Exchange Yi Gang quoted via MNI.
Key Quotes:
No basis for continuous yuan depreciation because of China’s rate of growth, big trade surplus, continuous increase in foreign direct investment and ample foreign-exchange reserves.
The yuan exchange rate formation mechanism won’t change after the unit’s inclusion into the basket and China will continue to implement policy revisions.
The ultimate goal is to realize a clean float of the yuan exchange rate from its existing, managed float.
During the transition from managed float to clean float China will take a gradual and prudent approach – helping the yuan’s two-way flexibility while maintaining a stable currency around a balanced, reasonable level.
(Market News Provided by FXstreet)