Shanghai Securities News reports on Guan Tao, head of the Balance of Payments department under the State Administration of Foreign Exchange, who has said there’s no chance that the yuan exchange rate will appreciate or depreciate sharply from current levels:
- Yuan is closer to the equilibrium level thanks to more balanced external payments
- Says a current account surplus and capital account deficit is the ideal structure for China’s external payments
- There is no need for the market to read too much into outflows under the capital account, and shouldn’t expect government policy to overreact either
- Added the yuan is not moving in line with demand/supply, noting that the yuan appreciated during the third quarter despite market participants buying U.S. dollars, though he provided no explanation
(via MNI)
