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Tuesday, December 1, 2015, 12:58

No basis for yuan's depreciation: PBOC

By Xinhua

BEIJING - China's central bank on Tuesday dismissed concerns over yuan depreciation after the currency's entry to the IMF's Special Drawing Rights (SDR) basket.

"There is no basis for continued yuan depreciation, and China is capable of keeping the currency basically stable at a reasonable level," central bank vice governor Yi Gang said at a press conference, citing high-medium growth and foreign exchange reserves as major factors underpinning the currency.

"In case of drastic fluctuation or abnormality in international balance of payments and cross-border capital flow, the central bank will not hesitate to intervene," Yi added.

The International Monetary Fund will include the Chinese currency to its SDR basket from Oct 1, 2016 with a weighting of 10.92 percent, as the currency has "met all existing criteria."

Yi said the yuan's SDR entry is not the end of the story, adding that China is committed to cementing the yuan's position as a global currency.

The People's Bank of China announced early Tuesday morning that it welcomes the IMF decision to include the redback in the SDR basket, saying the move shows the IMF's recognition of China's economic development and reform achievements.

"The joining of RMB in the SDR basket means the international community has greater expectations on China to play an active role in the world economic and financial arena," the statement reads.

The weighting of the other currencies in the basket is 41.73 percent for the US dollar, 30.93 percent for the euro, 8.33 percent for the Japanese yen and 8.09 percent for the British pound.

Following the announcement, the central parity rate of the yuan weakened by 11 basis points to 6.3973 against the US dollar on Tuesday, according to the China Foreign Exchange Trading System.

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