Yuan to Remain Strong after Countercyclical Factors End: Journal

The yuan is set for a strong trend with two-way fluctuations after regulators removed so-called countercyclical factors, the Chinese Securities Journal said in a Thursday editorial. The removal reflects the intention for a market-based approach allowing the flexibility of yuan exchange rates and monetary policy autonomy, the Journal said. The drop in depreciation risk will promote inbound capital and the opening up of the financial sector, and the neutral approach of multiple macroprudential policy tools will support outbound capital and acquiring overseas assets. A steady yuan exchange rate and high interest spreads between China and other economies will promote the acceptability and internationalization of the currency, the Journal wrote.