China Forex Reserves Stable, Yuan to Fluctuate: Daily

China's forex reserves should be stable this year despite a dip of 0.7% m/m to CNY3.14 billion in September, the Securities Daily reported on Friday citing Wang Chunying, a deputy director of the State Administration of Foreign Exchange. Wang attributed the drop to the rising dollar index, cross-border capital flows, and fluctuating asset prices. The yuan may widen its fluctuations under pressure from a potentially stronger dollar index, while counting on China's tighter monetary policies for support, the Daily citied the CIB macro-research team. China's higher rates of returns due to tighter liquidity will lead to wide fluctuations around 6.75 to the dollar, and the yuan shows no signs of either prolonged appreciation or depreciation, Li Chao, an economist from Zheshang Securities, told the Daily.