Yuan May Further Strengthen On Robust Exports In 2022: Herald

The Chinese yuan could further strengthen to around 6.3 against the U.S. dollar despite a possible hike in interest rates by the Federal Reserve ahead, as it is supported by robust trade and the steady recovery of the Chinese economy, the 21st Century Business Herald reported citing analysts. The PBOC has abundant monetary policy tools to curb any rapid and disorderly appreciation of the yuan, including increasing the foreign exchange deposit reserve ratio to control capital inflows, as well as releasing new QDII quotas and lowering the FX risk reserve ratio for forward forex trading to expand capital outflows, the newspaper said citing Guan Tao, a former forex official. China should increase trade settlement in yuan, increase QDII quotas, and support domestic institutions to purchase FX for foreign investment, so to ease appreciation pressure, Guan said.