China’s central bank stepped in on Sunday night to provide “forward guidance” support for the Chinese currency by talking up the yuan against the US dollar, the South China Morning Post reports. In an apparent move to ease market concerns over weakening of the yuan and capital flight from China, Yi Gang, a deputy governor of the People’s Bank of China, said in an interview with Xinhua that prospects for the US dollar are uncertain but the yuan is a “stable and strong” currency and its depreciation against the dollar was less than that of the Japanese yen or the euro. Yi’s comments indicated the PBOC might intervene in the foreign exchange market to support the yuan before the dollar-yuan rate broke the key level of 7.
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