China's central bank 'will not devalue yuan to lift exports'

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China's central bank deputy governor Yi Gang, who is also a Chinese People's Political Consultative Conference (CPPCC) member, reiterated the country's stance on the forex rate and monetary policy on the sidelines of the Two Sessions.

“Over the past 10 plus years, the yuan has been a strong currency. It is also a stable currency, and it has little volatility. We will not boost exports by devaluing the yuan. We will not wager on currency wars, as China is a responsible country. So generally speaking, our stance is to keep the yuan's forex rate stable within a reasonable range,” Yi said.

He also said China's forex rate regime is a managed floating system that is tied to a basket of currencies. The mechanism suits China's development, and has achieved good results in the past. Yi Gang noted the yuan's forex rate has little volatility compared to the euro, the Japanese yen, and the British pound.

And regarding inflation levels, Yi said the consumer price index will stay between two to three percent. The central bank's monetary policy will be stable and neutral he added, neither too tight nor too loose, to keep the economy growing while guarding inflation risks and asset bubbles.