China Downplays Currency Concerns Amid Record Outflows
- Capital account deficit largest since 2018 on record outflows
- Onshore yuan on track for worst week since devaluation
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China is able to accommodate the impact of the Federal Reserve’s interest rate hikes, a senior foreign exchange official said, downplaying concerns about the yuan’s weakness and capital outflows.
Recent moves in the Chinese currency were market-based and expectations on the yuan have been “basically stable,” said Wang Chunying, spokeswoman of the State Administration of Foreign Exchange. The foreign exchange market will likely remain stable due to China’s resilient economic fundamentals, trade surplus and foreign direct investment inflows, low foreign debt risks and the increasing flexibility of the yuan, she said.