China declares unusual currency depreciation is 'normal'
SHANGHAI (AFP) - China said on Wednesday that a sudden and unusual depreciation in the value of its tightly-controlled yuan currency was "normal", but analysts believe the slide could be aimed at speculative funds.
Communist authorities keep a tight grip on the yuan, also known as the renminbi (RMB), as one of their key tools to control the economy, and due to worries about unpredictable financial inflows or outflows.
"The exchange rate fluctuations this time are normal fluctuations compared to currency fluctuations in developed and emerging markets, so there's no need to over-interpret it," said the State Administration of Foreign Exchange, which advises the central bank on policy.
The yuan has in the past year steadily appreciated against the US dollar on the nation's foreign exchange market, rising more than three per cent in 2013, according to the central bank's monetary policy report for the fourth quarter.