China central banker says currency slide under observation

BEIJING – The head of China’s central bank says he’s closely watching the recent slide in the value of the yuan against the U.S. dollar, but the country’s economic fundamentals remain strong.

Yi Gang was quoted as saying Tuesday that the yuan’s depreciation reflects the strengthening of the dollar and “the effect of external uncertainties.”

The yuan’s 3 per cent decline against the dollar over the past two weeks is largely seen as reflecting fears over a possible trade war between the world’s two biggest economies. Punishing U.S. tariffs on some Chinese imports are due to take effect Friday, with China planning tariffs on an equal amount of U.S. exports.

Despite that, Yi said financial risks were under control and the China’s international balance of payments and currency flows were stable.