Ex-PBOC adviser Yu: Free-Floating Yuan is nothing to fear

Yu Yongding, a scholar at the China Academy of Social Sciences (CASS) and former China’s central bank adviser, made the comments amid a growing debate among Chinese economists about whether the yuan should be allowed to trade more freely in the official Shanghai Securities News today, as cited by Reuters.

Key Quotes:

“How the future exchange rate will go depends on central bank policy and I have no way of reading their minds, but I want to say that we should overcome the irrational fear of a free-floating yuan.” 

“(China) should be the country least afraid of a fluctuating exchange rate.”

He suggested the central bank set a “bottom line” of 25 percent for the yuan to depreciate.