Central bank says no basis for continued yuan slide

The governor of China's central bank has said there is no basis for continued depreciation of the yuan because the balance of payments is good, capital outflows are normal and the exchange rate is basically stable against a basket of currencies

In an interview with Caixin magazine published on Saturday, Zhou Xiaochuan dismissed speculation that China plans to tighten capital controls. He said there is no need to worry about a short-term decline in foreign-exchange reserves and added that the country has ample holdings for payments and to defend stability.

China's foreign-exchange reserves shrank in January to their lowest level since 2012, signaling that the central bank sold dollars to prop up the yuan as it fell to a five-year low. The weakening exchange rate and declining share markets have fueled global turmoil and helped send world stocks to their lowest level in more than two years.