China could take further measures to rein in yuan- former regulator By Reuters

© Reuters. FILE PHOTO: Yuan banknotes are seen on this illustrative {photograph} taken in Beijing July 26, 2010. REUTERS/Jason Lee

SHANGHAI (Reuters) – The Chinese language authorities might take additional measures if wanted to maintain the yuan secure, probably placing downward strain on the foreign money, a former overseas alternate regulator mentioned.

Policymakers might enhance yuan’s flexibility, develop capital outflows, or management capital inflows to rein within the yuan, which might deviate from financial fundamentals within the brief time period, wrote Guan Tao, international chief economist at BOC Worldwide and a former official on the State Administration of Overseas Trade (SAFE).

The yuan additionally faces downward strain from a number of market elements, together with additional strengthening of the , the shrinking unfold between U.S. and Chinese language yields, and the narrowing distinction within the development between the 2 economies, Guan wrote in an article revealed within the Shanghai Securities Information on Monday.

Guan, who beforehand headed SAFE’s stability of funds division, mentioned that the yuan is already shedding some momentum, citing shrinking buying and selling volumes within the interbank foreign exchange market.

hit a close to four-year-high in opposition to the greenback on Jan. 26 and an index monitoring yuan’s worth in opposition to a basket of currencies is flirting with the very best stage since late 2015.

China has already taken some measures, together with directing monetary establishments to carry extra overseas alternate in reserve, to decelerate yuan’s speedy appreciation.



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