DESPITE the yuan’s recent weakness against the U.S. dollar, there has been no panic selling of the Chinese currency and market expectations for the yuan’s value remain steady, China’s two main securities newspapers said in front-page articles yesterday.

    The articles in Shanghai Securities News and China Securities Journal came after the yuan fell against the dollar for three consecutive days to a five-year low, before steadying somewhat Tuesday.

    The weakness added to investors’ fears that China may be considering devaluing the currency again amid global market turmoil sparked by Britain’s vote to leave the European Union last week.

    The yuan’s fall was exacerbated by Britain’s vote to leave, which battered most emerging currencies, but sparked memories of China’s devaluation last August and another rapid depreciation early this year.

    “Although the yuan’s mid-point fell against the U.S. dollar on consecutive days, the mood in both onshore and offshore markets is basically stable with no signs of panic selling or a scramble for foreign currencies,” Shanghai Securities News reported, citing interviews with industry experts.

    The view was echoed by China Securities Journal, which said in a front-page article “expectations for the yuan’s value remain relatively stable, and people in the market are not rushing to buy foreign currencies, indicating that players in the forex market are becoming more rational.”

    Regulators appear to be stepping up efforts to calm market sentiment and guide expectations.

    China’s central bank, the People’s Bank of China, said Tuesday that despite recent fluctuations in the currency market, the yuan remains relatively stable against a basket of currencies, while expectations are steady.

    Before Brexit, most market watchers had already expected China would allow the yuan to weaken modestly this year as the economy continues to slow.

    Economists at Bank of America Merrill Lynch believe the yuan could ease to 6.80 to the dollar, from around 6.65 now.

    Fears of further yuan weakness could trigger more capital outflows, potentially tightening financial conditions in China and crimping economic growth, according to a BofA Merrill Lynch Global Research report.

    Bank of America Merrill Lynch has lowered its 2016 China growth forecast to 6.4 percent from 6.6 percent, citing Brexit’s expected drag on global trade, investment and financial markets. (SD-Agencies)