Yuan Unlikely to Weaken Sharply: Journal

The Chinese yuan is unlikely to depreciate sharply, as it is supported by China’s positive economic prospects, increased foreign holdings of yuan assets and controllable capital outflow risks, the China Securities Journal reported citing analysts. On Thursday, the onshore yuan fell the most in 10 months when it lost 426 basis points from the previous close to 6.3645 against the U.S. dollar, on a day when the dollar index rose to an 18-month high of over 97, the newspaper said. A moderate depreciation of the yuan enhances the currency’s flexibility and helps stabilize the economy by giving more space for monetary policy, the newspaper said citing Wen Bin, the chief researcher at Minsheng Bank.