China's Yuan 'Safe-Haven Currency', Says Bank Of China

BEIJING, Feb 16 (Bernama) -- The Chinese yuan is likely to keep appreciating and become a "safe-haven currency" amid global turbulence, Xinhua News Agency reported. "The yuan has held relatively firm against a basket of currencies and there remains no basis for its continued depreciation," said the report quoting Yao Yudong, Head, Research Institute of Finance and Banking, the People's Bank of China (BOC). Xinhua reported the central parity rate of the yuan against the US dollar strengthened by 196 basis points to 6.5118 on Monday, reversing the drop in January, when the market was permeated by depreciation talk. Pressure eased due to sharp declines in the US dollar index and weakening expectation, since the beginning of February, of a Federal Reserve rate hike, it said. "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. Xinhua said jitters were aroused by the western capital market, which saw gold soaring 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. -- BERNAMA