China won't risk sudden fall in yuan: JP Morgan

Beijing

CHINA'S central bank will keep the yuan stable even after the International Monetary Fund decides on whether to include it in its basket of reserve currencies, according to JP Morgan Chase & Co.

The nation won't risk a sudden drop for fear of harming an economy forecast to grow at the slowest pace in 25 years, said Zhu Haibin, JPMorgan's chief China economist. While Commonwealth Bank of Australia cited recent interest-rate cuts as it predicted a rapid weakening in the coming months, options traders are becoming less pessimistic. There's an 11 per cent probability the yuan will drop beyond 6.50 a dollar by year-end, down from 18 per cent at the start of this quarter, according to data compiled by Bloomberg.