PBOC Expects More Yuan Fluctuations as Market Adapts to Fixing
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China’s central bank said there’s no economic basis for the yuan to fall continuously, after its move to give markets more sway in setting the level spurred the biggest sell-off in two decades.
Just minutes after the People’s Bank of China lowered the daily fixing price by 1.6 percent on Wednesday, spurring a second day of selling, it acknowledged in a statement that there’ll be a “short period of adaptation” to its new price mechanism. It said fluctuations are a “normal phenomenon” and that it will strive to further improve market-based settings and keep the exchange rate “basically stable.”