THERE is no concrete basis for depreciating the yuan over the long term given China’s current growth rate, but more two-way volatility is unavoidable while reforms proceed, the Financial News said in a commentary yesterday.

    The report said that with the outlook for U.S. interest rate increases intact, existing looser capital controls are bound to result in some capital outflows. However, the paper said that the outflows were essentially dictated by economic forces rather than nervous investors fleeing the country.

    Although the Federal Reserve declined to hike U.S. base interest rates at its most recent meeting June 15, many market participants still expect one or more hikes later in 2016.

    The yuan has sold off against the dollar by around 2 percent since mid April, in what investors say is partly a reaction to expectations of future U.S. interest rate increases. (SD-Agencies)