Two-way movements expected for RMB exchange rate: forex official

BEIJING - Two-way movement will be normal for the exchange rate of the Chinese yuan in the future given uncertainties in the global economic recovery and the monetary policies of major economies, according to a senior official with the country's top forex regulator Thursday.

China will continue to improve the formation mechanism of the renminbi exchange rate to enhance its flexibility and keep it generally stable within a reasonable range, according to Wang Chunying, spokesperson with the State Administration of Foreign Exchange (SAFE).

The central parity rate of the Chinese currency renminbi, or the yuan, weakened 66 basis points to 6.4401 against the US dollar Thursday after three days of strengthening.

The Chinese currency has risen by over 1.5 percent in value compared with the US dollar since the first trading day this year.

Wang attributed the yuan's rise to a weakening dollar and steady domestic economic growth.

The dollar index, a gauge that measures the US currency's strength against six other major currencies, staged consistent declines in the past trading days over domestic uncertainties and a strengthening euro due to stronger-than-expected EU economic recovery.

In a sign of rising confidence in the currency, China's central bank decided last week to adjust the mechanism it created last year to support the renminbi and check capital flight amid worries of a weakening yuan.

Chinese enterprises are gradually changing their old thinking on the renminbi exchange rate, with fewer betting on unilateral appreciation or depreciation, said Wang, adding that SAFE will continue to prompt enterprises to improve risk management.