An undervalued currency is behind the mainland's excessive liquidity and runaway credit growth, economists told the South China Morning Post. Macroeconomic data released last week showed that measures to slow the economy have failed and Beijing needs to give the yuan more flexibility to reduce capital inflows and reduce domestic lending, state media said. In recent months, the government has raised interest rates, increased banksï¿½ reserve requirements and moved to reduce liquidity but the economy continues to race forward. On Sunday, People's Bank of China governor Zhou Xiaochuan said the mainland was moving to gradually increase flexibility in the yuan. Last July, the government allowed the yuan to appreciate 2.1% against the dollar and it has appreciated another 1.3% since then.