Representational image: iStock

Analysts at a forum in Beijing said that the yuan to US dollar exchange rate still has room to maneuver, according to a report from Yicai.com.

The view was shared by the State Administration of Foreign Exchange (SAFE), whose deputy director, Lu Lei, said at a forum that the yuan exchange rate remains “highly flexible” and able to respond to any market needs in the future, the report said. With the expansion of the CFETS index basket, the yuan is poised to remain stable to the dollar, Liu said.

The forum was organized by CLS Group, a leader in foreign exchange settlement, and the Chinese Academy of Social Sciences, according to the report.

Wen Bin, an analyst from Minsheng Bank, also said that while the recent appreciation of the yuan should not cause any near-term worries, long-term some concerns remain if one looks at its rebound.

The appreciation of the yuan followed the reported rise in GDP for the first half of the year, but under the same economic circumstances the yuan did not rise against the US dollar, Wen said.

Secondly, the appreciation of the yuan also followed the devaluation of the dollar this year. Thirdly, the capital controls on outbound money also increased this year, constricting the flow of capital from China, Wen said, according to Yicai.com.

Fourthly, China’s central bank also adjusted the formula for yuan fixing, leading to the rise of the yuan against the dollar, which led to the rise in yuan, Wen said.