CHINA is able to keep the yuan exchange rate basically stable, the country’s national planner said at a press briefing in Beijing yesterday.

    China also has the ability and confidence to maintain stability in employment levels, the spokesman for the National Development and Reform Commission said.

    The yuan slipped against the U.S. dollar yesterday as dollar demand surged after the long Lunar New Year holiday in China last week and after the central bank fixed a weaker midpoint.

    The People’s Bank of China set the midpoint rate at 6.5237 per dollar prior to the market open, 0.16 percent weaker than the previous fix of 6.513.

    The spot market opened at 6.5300 per dollar and was changing hands at 6.5260, softening 0.12 percent from the previous close.

    “Despite its recent volatility, the yuan is expected to remain stable in general in the near term,” said a dealer at a local commercial bank. “The government does not want the yuan to appreciate but to quash speculation in the currency.”

    The central guided the yuan weaker Tuesday after its strong midpoint helped push the Chinese currency to strengthen 1.2 percent Monday.

    The central bank has intensified its fight against speculation on yuan depreciation since early January amid a sharp slowdown in the growth of the world’s second-largest economy.

    “Given the volatility in foreign exchange markets in December, specifically in the Chinese yuan, suggests that the selling was mostly related to reserve management and currency policies,” Jefferies & Co. money market strategist Tom Simons wrote.

    (SD-Agencies)