It is not bad to slowdown the strengthening of the yuan against the US dollar when a government official says currencies are not a one-way street.
It’s normal that some participants who think the yuan will rise, while others think it goes the other way.
Some bankers are now forecasting that the yuan will slow its gains against the US dollar in 2012, it is said this would not hurt Hong Kong's ambitions to become an offshore yuan trading centre.
If the yuan kept going up straight forward, it would be hard for companies to choose to settle their business in yuan.
Likewise, some companies want to issue yuan-denominated bonds, a continually rising yuan against the US dollar, which would be a concern, because currency appreciation would mean the issuer of the bonds had to repay more in US dollar terms when it matured.
Beijing still has capital controls and the yuan is not yet fully convertible, but the mainland has been easing its currency regime. Since mid-2009, Beijing has allowed selected companies to settle cross-border trade in yuan instead of US dollars in a bid to boost the international status of the currency.
Further relaxation followed last July, when Beijing allowed issuance of yuan bonds, and the launch of yuan funds and yuan insurance policies which have been popular with investors betting on a rising yuan. The currency has appreciated more than 20 per cent since 2004.
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