China cites ‘flexible’ yuan exchange rate, healthy economy as buffer against US tapering

China’s advanced economy and the flexibility of its yuan exchange rate leave it well placed to absorb shocks from policy tightening by the US Federal Reserve, including hot money flows out of the country, the nation’s currency regulator has said.

The assurance from China’s State Administration of Foreign Exchange (SAFE) comes as the Federal Reserve inches closer to reducing monthly asset purchases and, possibly in 2023, raising interest rates.