China has enough confidence in the Yuan’s fundamentals – PBOC’s Yi

By FXStreet In an interview with Xinhua News earlier on the day, the People’s Bank of China (PBOC) vice Governor Yi Gang noted that markets overreacted to the recent fluctuations in the yuan.

Key Quotes:

Although the yuan exchange rate has become more flexible, the extent of the fluctuations remain lower than that of other currencies, and there is no need to overreact to this

The yuan’s exchange rate was also affected by some short-term speculators but China has enough confidence in the yuan’s fundamentals

The recent fall in forex reserves was the result of forex being transferred from the government to companies and of individuals who increased FX assets and reduced foreign debt, a situation that the government is in favor of

The inflow of capital is still relatively fast due to China’s high trade surplus and high direct investment from foreign institutions
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Source:: FX Street