China-US monetary policy divergence aids yuan stability: Ex-regulator

Increasingly divergent monetary policies between China and the United States would help rein in an excessive rise in the yuan by reducing foreign money inflows, a former Chinese forex regulator said on Wednesday.

The U.S. Federal Reserve is widely expected to accelerate monetary tightening to tame inflation this year, while the People's Bank of China needs to use monetary policy tools to stabilise growth.

"Therefore Sino-U.S. monetary policy divergence will likely become greater," Guan Tao, global chief economist at BOC International said in a commentary published in the Shanghai Securities News.

Fed tightening is expected to reduce foreign capital inflows into China, shrinking