THE current level of China’s yuan is appropriate because it reflects foreign exchange supply and demand and economic fundamentals, a top central bank researcher said Saturday, playing down talk of suspected official intervention.

    On Friday, the yuan ended its best week since 2007 after a rush of U.S. dollar sales over the past few days by major domestic banks.

    Lu Lei, head of the research bureau at the People’s Bank of China, reiterated the policy goal of keeping the yuan “basically stable on a reasonable and balanced level.”

    “We believe the current level is appropriate, it reflects the situation of the real economy, reflects the surplus and shortfall in global capital, also reflects money supply of our country and other countries,” he said.

    The yuan’s jump of close to 1 percent during the week followed months of weakness. Many foreign exchange traders suspected the turnaround was engineered by the central bank to deter speculators who had been betting on further yuan falls.

    The yuan is currently allowed to trade within a range 2 percent above or below the official fixing on any given day. Before last week, the spot rate had been hugging the weakest side of that band since January.

    (SD-Agencies)