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China's yuan not heading toward a depreciating path: People's Daily
October 19, 2016 / 1:41 AM / a year ago

China's yuan not heading toward a depreciating path: People's Daily

SHANGHAI (Reuters) - China’s yuan is not entering a depreciating path but pressure will persist in the short term amidst dollar strength, the overseas edition of the People’s Daily quoted experts as saying on Wednesday.

A 100 Yuan note is seen in this illustration picture in Beijing March 7, 2011. REUTERS/David Gray/File Photo

The Communist Party’s mouthpiece said the Chinese currency will remain basically stable in the mid- to long-term with two-way volatility, and a depreciation trend is unlikely to happen.

It added that the yuan is supported by signs that China’s economy is stabilizing. The yuan would also be bolstered by overseas investment following its inclusion in the currency basket determining the value of the International Monetary Fund’s synthetic reserve currency Special Drawing Rights.

Upbeat U.S. economic data has raised expectations of an interest rate hike by the U.S. Federal Reserve, piling pressure on the yuan. The global dollar index .DXY, a gauge of the dollar’s strength has gained 3.5 percent in the last two months.

The spot yuan rate CNY=CFXS against the greenback has fallen 1.0 percent so far this month.

Reporting By Winni Zhou and Nathaniel Taplin; Editing by Simon Cameron-Moore

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