SHANGHAI, Dec 8 (Reuters) - The chief China economist of JPMorgan Chase warned on Monday that any mismanagement of the yuan exchange rate, towards excessive weakness of the currency, could hurt Chinese financial markets and the economy.
The yuan
But Frank Gong said in an interview on Monday that he did not expect extended weakness of the yuan, and that Chinese authorities would be wrong to push it down significantly.
Gong forecast that in the next three months the yuan, which was at 6.8813 to the dollar early on Monday afternoon, would stay in a range of between 6.8 and 7.0. Between three and 12 months from now, it would appreciate 3 percent, he predicted.
Depreciation of the yuan could trigger competitive depreciation of other Asian currencies, which would not help Chinese exporters, he told Reuters.
"Mismanagement of the renminbi could cause huge capital outflows and destabilise the A-share market and property market at a time when confidence is low," he said.
"Chinese exporters are still outperforming. China should not resort to devaluation and it would be a wrong policy." (Reporting by Lu Jianxin; Writing by Andrew Torchia; Editing by Jacqueline Wong)