SHANGHAI: China's yuan rebounded modestly against the dollar on Thursday, buoyed by a slightly stronger central bank midpoint and bullish comments by senior officials on the economy, traders said.
Premier Li Keqiang said on Wednesday that China's economy, the world's second-largest, would not suffer a hard landing and would continue to grow at a medium to high pace in the long term without strong stimulus.
Li's comments were echoed by People's Bank of China Governor Zhou Xiaochuan, who said he was confident that steady growth and financial stability would ensure market confidence in the yuan.
"Those bullish statements appear to hint that the yuan's depreciation seen earlier this year won't last," said a trader at a European bank in Shanghai. "Still, the PBOC's recent midpoints do not point to a yuan appreciation either."
Spot yuan stood at 6.2268 per dollar at midday, up 0.07 percent from Wednesday's close, after the PBOC fixed its midpoint at 6.1531, up 0.05 percent from Wednesday.
Before Thursday's rebound, the yuan had slipped for three straight sessions, guided by weaker midpoints as the central bank moved to dampen speculation that it would allow the yuan to resume appreciation after the currency staged its biggest weekly rise of 0.6 percent since late 2011 last week.
The recent shift to holding the currency steady suggests that the PBOC's efforts to guide the yuan lower earlier this year to deter speculative bets on non-stop yuan rises is largely over, traders said.
Reflecting the yuan's weakness earlier in the year, the Bank for International Settlement (BIS) index for the yuan's real effective exchange rate (REER) - the currency's value against a trade-weighted basket after adjustments based on inflation - depreciated 0.6 percent from April to 114.05 in May.
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