A move by the U.S. Federal Reserve to raise interest rates could put pressure on China’s yuan to weaken further, but won’t likely trigger big capital outflows, a Chinese foreign-exchange regulator said Thursday.
Wang Yungui, a director of the regulation department of China’s State Administration of Foreign Exchange, said in a briefing that there was no basis for a large amount capital to leave China. He cited the country’s large trade surplus and an economic growth rate of about 7% year-over-year, calling that high by global standards and something that can ensure good returns.
He said the forex regulator has stepped up its efforts to monitor “abnormal” capital outflows since Beijing surprised global markets in August by devaluing the yuan by about 2%.
The regulator told its local offices to step up capital-flow data reports and to check on companies that had big foreign-currency purchases, according to Mr. Wang.
But he added that the regulator didn’t roll out new rules to curb foreign-currency purchases after the yuan’s depreciation in August.