China’s central bank has promised to step up efforts to stabilize the yuan, which has been declining, approaching its lowest level in 15 years. This move raises concerns about the strength of the economic recovery of Asia’s largest economy.
In a statement released today, the People’s Bank of China announced it would take “comprehensive measures and stabilize expectations” regarding the local currency. Furthermore, in its quarterly report on monetary policy, the institute said that it “will resolutely prevent the risks of large fluctuations”.
Finally, the monetary authority has promised to increase support for the wider economy, given that domestic demand is not yet “strong”. This pledge was reaffirmed after today’s data on manufacturing activity, which continued to contract in June, and services activity, which lost momentum over the past month.