The Communist Party secretary of China’s central bank attempted to calm forex traders on Thursday, warning against the prospect of shorting the plummeting Chinese currency.
Guo Shuqing told the state-run Financial News that the yuan is unlikely to devalue significantly, as some analysts have said the drop in the yuan’s value is a planned move to keep Chinese exports competitive.
“After last year’s adjustment, the exchange rate of RMB has entered into a reasonable range with bi-directional vitality. Economic fundamentals indicate that the RMB does not have a probability of a big devaluation,” the Financial Times quoted Guo as saying.
Following March’s government restructuring, Guo also holds the post of chief of China’s banking and insurance regulator. In his comments he advised against shorting the yuan in expectation of a sharp economic slowdown.
“In recent years, some international investors have tried to earn big profits by shorting the yuan. However, the facts have proved that they misjudged the situation,” said Guo.