BEIJING, May 7 (Xinhua) -- A Chinese economist has predicted that the depreciation of the yuan would not last long, the China Securities Journal reported Wednesday.
During an interview by the Journal, Yu Yongding, of the Chinese Academy of Social Sciences, said yuan depreciation would be temporary because of the huge current and capital account surplus of around 125 billion U.S. dollars.
Foreign exchange reserves rose 769 billion yuan (125 billion U.S. dollars) in the first quarter of 2014, while the exchange rate of RMB to U.S. dollar decreased by about 3 percent.
However, Yu believes that RMB depreciation has helped China reduce losses from arbitrage and speculation that ran wild during 2013 after increased yuan internationalization.
The depreciation increased the risks and costs of arbitrage and overseas speculation, eased hot money inflow and preserved financial stability, Yu explained.
Slowing economic growth since last year has helped capital outflow, which also contribute to RMB depreciation, said Yu, who believes the central bank should not abandon intervention, even if the exchange rate market is fully liberalized.
"The most crucial issue is to change away from the former growth method, rather than just avoiding economic decline," Yu said.
Recent yuan's depreciation within "normal" range: Chinese central bank official
WASHINGTON, April 10 (Xinhua) -- The recent depreciation in the value of Chinese currency renminbi, or the yuan, is within normal range and China is still on track toward a more market-oriented exchange rate regime, a senior Chinese central bank official said here Thursday.
"The recent movement of the renminbi, especially since February and March, I think is normal. The depreciation is only something like 2 percent," Yi Gang, deputy governor of the People's Bank of China, said at a seminar hosted by the School of Advanced International Studies in Johns Hopkins University. Full Story
Yuan's recent fluctuation not intended depreciation: Lagarde
WASHINGTON, April 10 (Xinhua) -- Managing Director of the International Monetary Fund (IMF) Christine Lagarde said on Thursday that she would not characterize the recent increased variation of China's yuan as an intended depreciation of the currency, but a move in the direction of yuan's internationalization.
"Certainly we welcome the internationalization of the renminbi going forward. I believe there will be steps in that direction going forward," Lagarde said at a news conference held before the IMF-World Bank Spring meeting due to open on Friday. Full Story