China’s Says No Plan To Devalue Yuan
China’s vice president told Bloomberg News on Thursday that his government has no intention of devaluing the yuan. “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 Yuanchao told Bloomberg in an interview on the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland. Li, who is also a member of the Communist party’s Politburo, also put the blame for the volatility in the yuan on the U.S. Federal Reserve’s first post-crisis rate rise in December. The yuan’s sharp swings this month have not only sparked capital outflows from China and a selloff in the stock markets but also stoked speculation China might once again devalue its currency, as it did in August 2015, to support a flagging economy.
Chinese Premier Li Keqiang said in a meeting with the president of the European Bank for Reconstruction and Development the country does not intend to use a cheaper yuan as a way to boost exports and has the tools to keep the currency stable, state news agency Xinhua reported on Saturday.