Yuan Depreciation Expectations Have Weakened In Near Term: Herald

The yuan will return to a wider range of trade as depreciation expectations weaken, and the surplus in the balance of payments offers support, said the 21st Century Business Herald in an editorial. The Covid-19 spread has been effectively controlled and production, and recent pro-growth policies and 15 bps cut in five-year LPR helped restore market confidence in the economy, the newspaper said. It added that a fall in U.S. bond yields and the dollar index also provide support for the yuan. The PBOC has abundant tools to stabilise the currency, including the issuance of offshore central bank bills to tighten the liquidity of offshore RMB and narrow the onshore-offshore yuan spread, the newspaper said.