The Chinese yuan is likely to keep appreciating and become a "safe-haven currency" amid global turbulence, a senior economist with China's central bank has said, after recent strong performance of the yuan.
"The yuan has held relatively firm against a basket of currencies and there remains no basis for its continued depreciation," said Yao Yudong, head of the Research Institute of Finance and Banking, the People's Bank of China.
The central parity rate of the yuan against the U.S. dollar strengthened by 196 basis points to 6.5118 on Monday, reversing drops in January, when the market was permeated by depreciation talk.
Pressure has been eased due to sharp declines in the U.S. dollar index and weakening expectation, since the beginning of February, of a Federal Reserve rate hike.
"China has without any doubt become one of the most reliable economies in the world," said Yao, citing the country's stable economic growth, foreign exchange reserves, low debt rate and widened international trade surplus.
Jitters were aroused by the fickle Western capital market, which led the gold price to soar as more foreign investors transferred their money from the stock market to safer assets, such as treasury bonds and gold.
Yao suggested risk-averse investors adopt the yuan as an investment choice.
