Current fluctuations of the renminbi (RMB) exchange rate should not be seen as a sign of devaluation, China's foreign exchange regulator said Thursday.
The market is insufficiently tolerant of RMB exchange rate fluctuations, Wang Chunying, an official of the State Administration of Foreign Exchange (SAFE), told a press conference.
Wang said more consideration should be taken of the RMB multilateral exchange rate against a basket of currencies and its long-term trend.
The central parity rate of the RMB, or the yuan, weakened by 96 basis points to 6.4236 against the U.S. dollar on Thursday, the lowest in four years, according to the China Foreign Exchange Trading System.
This volatility is the expected result of RMB interest rate marketization, which reflects both domestic demand and supply and changes in the global financial market, said Wang Yungui, another SAFE official. He added that given China's stable economic and market fundamentals, there is no basis for the yuan's long-term depreciation.
China is capable of keeping the yuan exchange rate at a "reasonable" level and sees no need for continued depreciation, the People's Bank of China (PBOC) Vice Governor Yi Gang said earlier this month.
