Yuan could go 'either way' if central bank moves in future, says PBOC

Shanghai

THE yuan will probably move in both directions in the future following last week's devaluation as the economy stabilises, according to Ma Jun, chief economist at China's central bank.

A more market-oriented pricing mechanism for the yuan will help to avoid excessive deviation from the equilibrium level and significantly reduce the possibility of sudden fluctuations, Mr Ma said in an e-mailed statement on Sunday. The economy will probably grow about 7 per cent this year, he said.

The yuan halted a three-day slide on Aug 14 following its first major devaluation since 1994 after the central bank said it will intervene to prevent excessive swings. Policy makers are trying to balance the need for financial stability with a desire for stronger exports and the yuan's inclusion in the International Monetary Fund's basket of reserve c…