SHANGHAI (Reuters) - The People's Bank of China will allow the yuan to rise or fall against a basket of currencies in the medium term, the central bank's chief economist was quoted saying by the China Business News on its website on Wednesday.

"What we do, is to reduce the yuan's short-term volatility against the basket using the mid-point pricing mechanism as the main thread, but will allow some degrees of appreciation or depreciation against the basket in a relatively long period of time," Ma Jun was quoted by the newspaper as saying.

Ma said that the yuan's medium-term trend is determined by a number of factors, including macroeconomic situations, market supply and demand, people's expectations and price indexes in different countries, the newspaper quoting him as saying.

(Reporting by Samuel Shen and Brenda Goh; Editing by Jacqueline Wong)