China central bank to keep yuan largely stable against currency basket

[BEIJING] China's central bank plans to keep the yuan basically stable against a basket of currencies and fluctuations of the Chinese currency against the US dollar will increase, its chief economist said on Monday.

The yuan will also not be strictly pegged to the currency basket, Ma Jun, the People's Bank of China's chief economist, said in a statement posted on the central bank website.

Earlier on Monday, China guided its yuan currency higher, and offshore it surged against the dollar, spurred by what traders called aggressive intervention by Beijing, although Chinese stocks tumbled again as doubts persisted over policymakers' intent.

The central bank set the mid-point for the yuan at 6.5626 per dollar, firmer than Friday's fix and substantially stronger than the spot yuan's previous unofficial close of 6.5938. The yuan is allowed to stray no more than 2 per cent either side of the mid-point.

REUTERS