MNI: Yuan Stability PBOC's Short-Term Priority: Advisor Sheng

--Updates story published At 10:20 EDT, October 24.

     BEIJING(MNI) - The People's Bank of China will look to keep the yuan's

exchange rate stable and it is unlikely to break below 7 in the short-term,

although the currency could turn lower at some future point as many factors

affecting it remain uncertain, a senior PBOC advisor told MNI Thursday,

expanding on comments published Wednesday.

     Adding to his remarks, Sheng Songcheng said stability, not reform was the

more important near-term aim for the central bank.

     "In the near term, the more important task for the central bank should be

maintaining the stability of the yuan exchange rate, not the reform of the yuan

exchange rate formation mechanism," Sheng, an advisor to the People's Bank of

China, told MNI in an interview.

     "Therefore I do not think the yuan will break 7 level in short term," Sheng

said.

     In his latest interview with MNI, Sheng said his earlier comment that "It

is hard to say (if USDCNY would break 7) as of the end of the year" shouldn't be

interpreted as meaning that the yuan could break the level by year-end, but

rather that many factors remain uncertain.

     The yuan was last trading at 6.9450 against the U.S. dollar, with both

USDCNH and USDCNY trading close to the year highs.

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MX$$$$]