FX Regulators Expected To Stabilize Yuan In Due Course

Forex regulators have sent a clear signal that policy tools will be used in due course should depreciation pressure on the yuan increase, said Wang Qing, chief macro analyst at Golden Credit Rating. The People’s Bank of China said on Tuesday it will issue CNY20 billion three-month and CNY15 billion one-year central bank bills in Hong Kong on August 22, the fifth time this year. Wang said the issuance scale has increased significantly, which tightens yuan liquidity in the offshore market and increases the cost of shorting yuan. Wang believes the currency is less likely to fall below last year’s low point of 7.37 in the short term, given that real estate risks would be effectively controlled and supporting policies take effect. (Source: 21st Century Business Herald)