‘Chinese yuan still a strong currency, should stabilise’

The yuan’s decline in value has accelerated since Donald Trump’s surprise victory in Nov 8’s US presidential election and it plumbed 8-1/2 year lows versus the dollar last week. “(China’s) international balance of payments are basically stable, the merchandise trade surplus remains relatively large, and the Chinese yuan has the conditions to remain basically stable within a reasonable range in the future,” People’s Bank of China vice governor Yi Gang said on state TV. Yi said the yuan showed characteristics of a strong currency as it has fallen less than other currencies against the dollar in recent weeks and rose versus other units in October, according to the official Xinhua news agency. He said the yuan’s volatility had been due mainly to unexpected events including Trump’s election, a sudden increase in expectations that the Fed will raise interest rates, and Britain’s vote in June to leave the European Union. “The movement of the US dollar going forward is uncertain, and we can’t rule out the possibility that changing market expectations will cause some decline in the dollar,” Yi was quoted as saying.