Depreciation pressures on China's yuan have eased: PBOC official

Updated 2017-07-19 09:46:21 Global Times/Agencies

Depreciation pressures on the Chinese yuan have diminished as a result of more robust economic growth and rising foreign exchange reserves, a senior central bank adviser said in an interview with official State media published on Tuesday.

"Market confidence in the renminbi [yuan] is strengthening, while expectations of devaluation are getting ever weaker," Huang Yiping, a member of the People's Bank of China's (PBOC) monetary policy committee, told the Financial News.

China's foreign exchange reserves edged up in June for a fifth consecutive month as capital outflows eased in the face of tighter controls over moving funds out of the country and a pause in the U.S. dollar's rally.

China will also look to give its currency greater flexibility, expand its free floating range and reduce intervention in the foreign exchange markets, Huang said.

The central bank has long called for greater long-term flexibility in the yuan as China pushes ahead with its plan to further internationalize its currency.

Huang also said that while there were still downward risks to China's economic growth, the pressure had eased and there should be "no problem" for the country to aim for its target of around 6.5 percent full-year GDP growth.

China's economy expanded by a faster-than-expected 6.9 percent in the second quarter from a year earlier, giving policymakers room to tackle big economic challenges ahead of a key Party meeting later this year.

However, Huang added that there were still many risks in the financial markets, a key focus for the central government as it looks to stamp out risky behavior driven by corporations and lenders. He pointed to shadow banking, online financing and local government financing as the three main areas of uncertainty.

The PBOC set the yuan midpoint rate at 6.7611 per dollar on Tuesday, slightly weaker than the previous fix of 6.7562.

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