China’s Central Bank Governor Zhou Xiaochuan said there was no basis for further decline in the value of the yuan and dismissed the need for stricter capital controls to stem the outflow of foreign exchange, according to an interview published Saturday in the mainland financial magazine, Caixin, local media reported.
Assuring the public that the exchange rate was basically stable against a basket of currencies, and the capital outflows seen in recent times were normal, Zhou said China has ample foreign exchange hoards to fulfill its trade commitments and to defend the stability of the Renminbi, South China Morning Post reported.
“It is normal for foreign reserves to rise and fall as long as the fundamentals face no problems,” Zhou said in his first public comments on the bank’s policy since it devalued the yuan by 2 percent in August.
China’s foreign-exchange reserves shrank in January to their lowest level since 2012, as the central bank continues to sell large sums of U.S. dollars to prop up its currency — currently at a 5-year low. Chinese financial markets will open Monday after the week-long Lunar New Year holiday.