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Battered Yuan Posts Worst Year Since 1994 as HSBC Preaches Calm

  • Top forecaster says weakness a result of new flexible policy
  • Offshore currency pares day's losses on suspected intervention
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There’s no need to panic, according to the yuan’s top forecaster, even as the currency posted the biggest annual loss in more than two decades and a majority of economists predicted a further depreciation in 2016.

“While a weaker yuan could create fear initially, the market will realize it’s a natural consequence of a more flexible yuan and divergent U.S.-China monetary policy," said Ju Wang, a Hong Kong-based senior Asian currency strategist at HSBC Holdings Plc, which had the best estimates for the onshore yuan over the last four quarters as measured by Bloomberg Rankings. A more adjustable policy will allow for swift reactions to domestic conditions, which "would be structurally positive for China’s economy,” she said.