Yuan unlikely to depreciate further

BEIJING. KAZINFORM - Pressure on the yuan to depreciate has almost been completely released, and its value willremain stable, although the US Federal Reserve has still raised a rate hike possibility,according to China's foreign exchange regulator.

"There is no foundation for further depreciation of the currency, as the balance of paymentsremained in a great surplus and the around 7 percent economic growth rate is remarkable inthe world," said Wang Yungui, an official at the State Administration of Foreign Exchange(SAFE). Wang remarked that at a press conference, before the US Fed's meeting on Thursday whichcould be the first time that it raises rates in more than nine years. Under the US rate hike expectation and the yuan's depreciation pressure, China has seenincreasing capital outflows in July and August, reflected by the drop of funds outstanding forforeign exchange and foreign exchange reserves. "There were fluctuations of cross-border capital flows, but that was normal," said Wang. "There was no sign of massive capital outflows from China." The SAFE denied to take extra measures to ban the buying and selling of foreign exchangesin order to control capital flows, according to Chinadaily. "What we did was like a security check at the airport. We tightened data monitoring on cross-border capital flows and required some companies to explain their sharp growth of foreignexchange trade," said Wang. The official also said that the government will continue to improve reforms to further open upthe country's capital market, including a modification of the existing foreign exchangemanagement regulations. Photo/Agencies