THE yuan is at an appropriate level currently and its fluctuations will not necessarily cause disorderly capital flows, a senior official at the People’s Bank of China said yesterday.

China is able to “navigate all scenarios” arising from Washington’s recent move to label China a currency manipulator, Zhu Jun, head of the central bank’s international department, said in an interview.

She said China was “shocked” by the U.S. Treasury Department’s move last week to label China a currency manipulator, hours after China allowed the yuan drop through a key support level to its lowest point in more than a decade.

China is confident that the yuan will be a “strong currency” over the medium and long term, Zhu said.

The People’s Bank of China lowered its official yuan midpoint for the ninth straight day to a fresh 11-year low yesterday to reflect broad weakness in the local unit.

The central bank set the midpoint rate at 7.0326 per U.S. dollar prior to market open, 115 pips, or 0.16 percent, weaker than the previous fix of 7.0211 and the weakest since March 25, 2008.

But yesterday’s official guidance rate came in firmer than market expectations, traders said, a situation that has been persistently seen since last week.

China’s exchange rate had been broadly in line with economic fundamentals for five consecutive years, the International Monetary Fund (IMF) said Friday in its latest report.

Zhu said the U.S. currency move denied China’s long-time effort in reforming its exchange rate system and keeping the yuan’s exchange rate stable, in addition to breaking international rules by judging other countries’ currency rate based on its domestic laws.

(SD-Agencies)