China warns against ‘gambling’ on yuan, says stabilising forex market top priority
- People’s Bank of China says in a rare and stern warning that stabilising the foreign exchange market is a top priority
- Onshore yuan finished the domestic trading session on Wednesday at 7.2458 per US dollar, its weakest close since January 2008
China’s central bank issued a stern warning against one-way bets on the yuan’s depreciation, ordering banks to shoulder responsibility to stabilise the currency which weakened to its weakest level against the US dollar since the 2008 global financial crisis on Wednesday.
“The foreign exchange market is of great significance, and its stability is the top priority,” said the statement following a meeting chaired by PBOC vice-governor Liu Guoqiang and attended by officials with the State Administration of Foreign Exchange and more than a dozen state-owned banks.
The meeting of the China Foreign Exchange Market Self-Regulated Body also targeted currency speculation and irregularities by financial institutions.
Don’t gamble on one-way appreciation or depreciation of yuan. Such gambling will eventually end up with a loss
“What should be realised, it can never be precisely forecast a specific level of the exchange rate. Two-way fluctuations are a normality. Don’t gamble on one-way appreciation or depreciation of yuan. Such gambling will eventually end up with a loss,” it said.