China expects ‘relatively stable’ yuan this year
BEIJING: China’s central bank governor said yesterday the yuan should be ‘relatively stable’ this year after losing seven per cent of its value in 2016 amid accusations by US President Donald Trump of currency manipulation.
People’s Bank of China Governor Zhou Xiaochuan said the world’s number-two economy was expected to stabilise after posting its slowest growth in more than a quarter of a century last year, with benefits for the yuan.
“Under these circumstances, we believe this year that the yuan exchange rate will be relatively stable,” Zhou said in Beijing.
He added however that “no one can predict exactly what uncertainties and events” will impact the yuan.
“Of course, the foreign exchange market is always very sensitive, and will follow the overall global economy, as well as continuing fluctuations in China.”
The country has struggled to prop up the yuan in the face of a huge flight of capital as the prospects of better and safer returns overseas entice investors away from the Chinese market.
Trump, however, has repeat- edly accused Beijing of deliberately weakening the yuan to boost exports and has threatened to officially declare it a currency manipulator and slap hefty tariffs on its goods.
Zhou’s remarks came on the sidelines of the annual meeting of China’s Communist-controlled rubber-stamp parliament, where the ruling party approves legislation and sends signals about its plans for the year.
Opening the session on Sunday, Premier Li Keqiang announced a 2017 official economic growth target of “around 6.5 per cent, or higher if possible”, citing an even “more complicated and graver situations” this year.
Last year’s growth came in at 6.7 per cent, lowest since 1990.