Yuan set to stay at current level

The exchange rate of the Chinese currency, the yuan, is expected to stay roughly at the current level with fluctuations in a minor range in the rest of this year, said Fan Jianping, chief economist of the State Information Center, on Monday.

The exchange rate of the yuan to US dollar decreased by about 3 percent in the first quarter of this year, which helped curb arbitrage and speculation and hot money inflow, which ran wild last year and early this year.

The depreciation of the yuan has primarily met the target, with relatively a small amount of hot money inflow recorded in the first quarter, Fan said at the annual conference of the Association of Chartered Certified Accountants, an international professional organization, for its South China operation.

The Chinese government does not intend to depreciate the yuan to boost exports or to expand trade surplus, but instead, aims to achieve balanced trade situation.

Too much depreciation will lead to huge capital outflow and pose greater harm to the economy than appreciation.

The economic fundamentals do not point to substantial yuan appreciation this year.

The outlook of relatively high economic growth of China in coming years means the yuan will appreciate in the long run, Fan said, adding the exchange rate of the yuan would rather be determined by market factors.

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