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Chinese yuan likely to appreciate along with economic recovery, Deutsche Bank

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2014-07-31 GMT+8:00

BEIJING, July 29 (Xinhua) – The Chinese yuan is likely to appreciate moderately as signs for China's economic recovery are clear, said a forecast report released by the Deutsche Bank on Monday.

China's GDP data for the second quarter indicated that the country's economy was gradually recovering, the report pointed out. Meanwhile, the purchasing managers' index (PMI) for June shows that the recovery is likely to extend to the third quarter when fiscal expenditure will increase, targeted relaxed monetary policies are expected to be released and external demand may pick up.

Although new credit default events may happen in the third quarter,Chinahas the ability to continue orderly regulating and controlling the events, according to the report.

The report also noted thatChinahas recently released policies to liberalize cross-border RMB liquidity and raise flexibility of RMB exchange rate. These policies have started to push onshore and offshore RMB markets to have the same trends, but shortfall of liquidity is likely to deter the process in the short term.   (Edited by Liu Xiaoyun, liuxy08@xinhua.org)

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