RECENT weakness in China’s currency is within the normal range and doesn’t signal a change in economic fundamentals, according to China’s Finance Minister Lou Jiwei.

    The offshore yuan fell 1 percent to 6.0933 per U.S. dollar in the five days through Friday, a decline unseen since September 2011. A Chinese manufacturing index fell to the lowest level in seven months, according to a preliminary purchasing managers’ index released Thursday. Economists predict gross domestic product will climb this year at the slowest pace since 1990.

    “There will be ups and downs” and recent moves are “within normal range,” Lou yesterday said in Sydney, where he is attending a meeting of Group of 20 (G20) finance ministers and central bankers. “You can’t say that the yuan is starting to depreciate just because of a small volatility.”

    The onshore yuan fell 0.41 percent last week to close at 6.0919 in Shanghai on Friday, according to China Foreign Exchange Trade System prices. The People’s Bank of China cut the daily reference rate Friday to a two-month low of 6.1176.

    The central bank said last week that it plans to expand the yuan’s trading band in an orderly manner in 2014, while broadening cross-border usage of the currency.

    The onshore spot rate can currently diverge a maximum 1 percent from the daily fixing, a limit that was expanded in April 2012 from 0.5 percent, and before that from 0.3 percent in May 2007.

    Global yuan trading volume surged to US$120 billion a day on average in April 2013, from US$34 billion in 2010, according to a Bank for International Settlements survey.

    (SD-Agencies)