On Tuesday, China's Central Bank spoke out against big currency swings. It has stated that it will take steps to keep the yuan stable. The People's Bank of China (PBOC) also said that the yuan did not necessarily need to weaken against the dollar when the index measuring the US currency's performance against a currency basket rises.
The PBOC will "take comprehensive measures, stabilize expectations, resolutely curb big ups and downs in exchange rates," the central bank said in an article posted on its website. It would also act to "keep the yuan basically stable on a rational, equilibrium level," the PBOC added.
The yuan has slumped more than 11% against the dollar this year, touching at one point its weakest level since the 2008 global financial crisis, weighed down by US monetary tightening, China's economic slowdown and capital outflows.
Source: reuters.com