China has no plan to pursue a policy of yuan devaluation, Vice President Li Yuanchao said on Thursday, adding that market forces are guiding the movement of the currency.
“The fluctuations in the currency market are a result of market forces, and the Chinese government has no intention and no policy to devalue its currency,” Li told Bloomberg News in an interview in Davos.
He redirected concerns about exchange-rate volatility to actions by the US Federal Reserve, saying that “fluctuations in the currency market started with the raising of interest rates by the Fed.”
The comments by Li follow a volatile start for the yuan this year, which began with an unexpectedly large reduction in the reference rate in onshore trading in China, the report noted.
The yuan dropped 1.5 percent in the first week of January, stoking concern about policy intentions.
In other comments, Li told Bloomberg that China is willing to keep intervening in the stock market.
The market is “not yet mature”, he said, adding that the government will boost regulation to avoid volatility.
Li, who is a member of the Chinese Communist Party’s Politburo, is in Davos to attend the World Economic Forum’s annual meeting.
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