Yuan Unlikely To Depreciate Sharply: Journal

The yuan is more likely to see a mild weakening against the U.S. dollar instead of a sharp depreciation in the short and medium term, as China's relatively high trade surplus will offset the capital outflows in portfolio investments, the China Securities Journal reported citing analysts. Though the China-U.S. 10-year treasury bond spread turned negative for the first time since mid-2010 on Monday, the real interest rate spread is still considerable after taking inflation into account, the newspaper said citing analysts. The central parity rate of the yuan may fluctuate between 6.3 and 6.8 against the U.S. dollar this year, the Journal said citing Gao Ruidong, chief economist at Everbright Securities.