Yuan gives up 2023 gains
The yuan is unlikely to experience sharp volatility as China's economic fundamentals, balance of payments and foreign exchange reserves are generally stable, a state-run newspaper said on Wednesday. China's foreign exchange regulator also "has the experience and tools to deal with abnormal fluctuations in the yuan," an article in the Economic Daily said. The commentary comes at a time when the yuan has been under renewed downside pressure. It weakened past the psychologically important 7 to the US dollar level last week to hit its lowest point in more than five months. The People's Bank of China said last Friday that it would resolutely curb large fluctuations in the exchange rate and would look at encouraging more discipline in how dollar deposits are managed. Shortly after the Economic Daily article was published, it was revealed that the yuan had given up all the gains it made this year against its major trading partners. The trade-weighted CFETS yuan basket index fell to 98.51 - the lowest since December 26, 2022, according to a Reuters calculation based on official data. (Reuters)