A subtle change to Beijing’s familiar language on its exchange-rate policy suggests that China’s leadership is preparing for more volatile currency moves this year, according to The Wall Street Journal. In his annual keynote speech to China’s National People’s Congress on Sunday, Premier Li Keqiang dropped a pledge he had made in similar speeches in the past three years to ensure that the yuan “remains generally stable at an appropriate and balanced level.” The removal of the phrase suggests China’s government is ready to tolerate further declines in the yuan’s value against the dollar, as signs grow that the US Federal Reserve is readying for a series of interest-rate increases this year. Markets are pricing in a quarter percentage-point rise at the Fed’s meeting next week. Instead of repeating the pledge, Mr. Li said in his speech that the yuan’s exchange rate would be further liberalized and that “the currency’s stable position in the global monetary system will be maintained.”
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