Yuan May Continue To Weaken Moderately: Journal

The yuan may continue to weaken with the narrowing of interest spreads between China and foreign countries and volatility of cross-border capital flows, though it is unlikely to depreciate significantly as forex regulators have sufficient tools to keep it at a reasonable level, the China Securities Journal reported citing analysts. The central bank is expected to maintain yuan flexibility and promote the self-balancing of the forex market by adjusting supply and demand, the newspaper cited analysts as saying. The Journal noted that introducing counter-cyclical factors in the CNY central parity rate, adjusting the risk reserve ratio for forward forex sales as well as the liquidity of offshore yuan trade are options.