Business / Economy

Currency fluctuation 'completely normal'

By Jiang Xueqing ( Updated: 2015-03-05 20:14

A slight depreciation of the yuan against the US dollar is completely normal because two-way fluctuations of the Chinese currency have become a "new normal", or a common situation today, said Yi Gang, deputy governor of the central bank on Thursday.

The yuan has waved goodbye to 10 years' of continuous appreciation against the dollar and is getting very close to a balance. The exchange rate has become more flexible and market-oriented, said Yi, who is also a member of the National Committee of the Chinese People’s Political Consultative Conference.

China widened the yuan's trading band against the dollar from 1 to 2 percent in March last year. He indicated that the central bank is in no hurry to further widen the band.

The country's economic fundamentals are positive and its cross-border capital inflows and outflows remain healthy in general, he said.

Last year, more than 100 million Chinese tourists traveled overseas. The flows of people, commodities and investment led to two-way cross-border capital flows.

In terms of the internationalization of the yuan, he said: "It is a natural market process and a choice of market entities out of their own interest. Neither the central bank nor the administration has used administrative power to promote the internationalization of the yuan. The market will choose whether to speed up the process or not".

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