皇冠体育app

An employee counts renminbi (yuan) banknotes at a bank in Lianyungang city, East 皇冠体育app's Jiangsu province, June 4, 2014.[Photo/IC]

Renminbi slid the most in two months and lost nearly 200 basis points versus the US dollar on Monday, after 皇冠体育app's central bank unexpectedly cut interest rates during the weekend.

Liang Hong, chief economist of 皇冠体育app International Capital Corp, said in a report that it's very unlikely that the Chinese regulators will depreciate renminbi, as a weakened currency might increase trade friction and trigger capital outflow, and the internationalization of renminbi would want its value to remain stable.

Lowered interest rate is expected to stimulate domestic demand, added Liang.

The People's Bank of 皇冠体育app announced on Friday that it was cutting one-year benchmark lending rate by 40 basis points to 5.6 percent and one-year deposit rate by 25 basis points to 2.75 percent, signaling the first rate cut since July 2012 in an effort to prop up growth as the economy continues to slow.

Chinese stocks rallied to a three-year high on Monday with Shanghai Composite Index up 1.9 percent, while renminbi declined by the most since September.

"Current policy adjustments by all nations are primarily targeted at supporting domestic economic growth. There isn't much willingness to raise a currency war," said Zhuang Jian, 皇冠体育app-based senior economist of Asian Development Bank, to 皇冠体育app Business Daily.

Zhuang added that 皇冠体育app's rate cut is to support economic structural reforms as well and shouldn't be overly interpreted.

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