China official blames Fed for global market rout, not yuan

Yao Yudong, a senior Chinese central bank official, says China‘s devaluation of its yuan currency should not be made a scapegoat for the recent global stock market rout. [PHOTO: REUTERS]

The global stock market rout of the past week was sparked by concerns over a possible interest rate rise by the US Federal Reserve and not by the devaluation of China’s yuan currency, a senior Chinese central bank official told Reuters.

Yao Yudong, head of the bank’s Research Institute of Finance and Banking, said the US central bank should delay any rate hike to give fragile emerging market economies time to prepare. He said Beijing’s decision to let the yuan fall in value against the dollar should not make it a scapegoat for the sell-off. “China’s exchange rate reform had nothing to do with the global stock market volatility, it was mainly due to the upcoming US Federal Reserve monetary policy move,” Yao said. “We were wronged.”