Investment bank JPMorgan Chase said the yuan is relatively stable against a basket of currencies despite continued drops against the U.S. dollar.
Stronger signals pointing toward U.S. interest rate hike in December have put more downward pressure on the yuan, a trend that will persist in the fourth quarter, said Jing Ulrich, managing director and vice chair of Asia Pacific at JPMorgan Chase, at a press seminar Monday.
As of Monday, the central parity of the yuan against the dollar weakened to 6.8985, the lowest in more than eight years.
But the yuan remained stable relative to other currencies in the basket, as the euro and Japanese yen also tumbled to new lows, Ulrich said.
Meanwhile, uncertainties concerning global trade will possibly not reverse China’s steady growth which pivots to consumption and the service sector, Ulrich said.
In light of the statistics in the first three quarters, China is well positioned to deepen reforms at state-owned enterprises and banks while continuing to see steady growth in 2017, Ulrich stated.
A better-structured and transforming Chinese economy serves as a safe harbor and ballast for the global economy, which is still reeling after the American presidential election and Brexit, she said.
China’s GDP expanded 6.7 percent year on year in the third quarter, holding steady with the second quarter and within the government target range of 6.5 to 7 percent for 2016, official data showed.
Chinese officials have repeatedly ruled out the possibility of a sharp, sustained depreciation of the yuan against the dollar, citing the country’s solid economic fundamentals, current account surplus and abundant forex reserves. Enditem