Chinese Yuan Steady After Inflation Data

The offshore yuan held steady around 7.21 per dollar even as data pointing to persistent deflationary pressures in China supported bets on further monetary easing.

Data showed that Chinese consumer prices for January dropped the most in more than 14 years, while producer prices declined for the 16th consecutive month.

However, analysts argued that Chinese authorities will likely seek to stabilize the currency amid efforts to prop up a faltering economic recovery.

The yuan was also supported recently by the prospect of more forceful and concrete policy measures to support Chinese assets.

The country’s securities regulator vowed to prevent abnormal market fluctuations and will reportedly update President Xi Jinping on market developments, while state fund Central Huijin Investments pledged to expand ETF purchases.