No Basis For Yuan's Continued Depreciation, Says China's Central Bank

BEIJING, Dec 1 (Bernama) -- China's central bank on Tuesday dismissed concerns over the yuan's depreciation following the currency's entry into the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket, Xinhua News Agency reported. "There is no basis for the continued depreciation of the yuan, and China is capable of keeping the currency basically stable at a reasonable level," it quoted central bank vice governor Yi Gang as saying. Yi also cited high-medium growth and foreign exchange reserves as major factors underpinning the currency. "In case of drastic fluctuation or abnormality in the international balance of payments and cross-border capital flow, the central bank will not hesitate to intervene," he added. Xinhua reported the IMF will add the Chinese currency to its SDR basket from Oct 1 next year with a weighting of 10.92 per cent, as the currency has "met all existing criteria." The weighting of the other currencies in the basket is 41.73 per cent for the US dollar, 30.93 per cent for the euro, 8.33 per cent for the Japanese yen and 8.09 per cent for the British pound. Xinhua said following the announcement, the central parity rate of the yuan weakened by 11 basis points to 6.3973 against the US dollar on Tuesday, according to the China Foreign Exchange Trading System. --BERNAMA