China to keep yuan broadly stable

China will maintain stability in its yuan currency while allowing more two-way fluctuation to reflect changes in supply and demand, the operator of its foreign exchange trading platform said on Wednesday. The comments from the China Foreign Exchange Trade System (CFETS), which falls under the central bank, follows speculation that policymakers may be less willing to defend the Chinese currency.
A subtle change in the language used to describe the yuan in Premier Li Keqiang's annual work report on Sunday had sparked that speculation. But, deputy central bank governor Yi Gang has since said that China will stick to its managed floating exchange rate framework to keep the yuan currency basically stable. A statement by CFETS also held little prospect for major change. "The renminbi exchange rate will continue to be basically stable at a reasonable and balanced level, and its flexibility and two-way fluctuations will increase based on changes in the international currency market and market supply and demand," CFETS said on its website.