January 28, 2016 / 11:49 AM / 4 years ago

China will keep yuan stable, communicate with markets: premier

BEIJING (Reuters) - China will keep the yuan “basically stable” and improve communication with financial markets on the currency, Premier Li Keqiang told International Monetary Fund (IMF) chief Christine Lagarde on Thursday.

Li said China had kept the yuan basically stable against a basket of currencies and there was no basis for continued yuan depreciation, according to his remarks published on a central government website.

“The Chinese government has no intention to promote exports through currency depreciation, nor it will launch a trade war,” Li told Lagarde in a telephone call.

The government would “strengthen its communications with the market, and keep the renminbi (yuan) exchange rate basically stable at a reasonable and balance level”, Li said.

Lagarde told the World Economic Forum in Davos that financial markets needed more clarity on how Chinese authorities were managing their currency, particularly the relationship of the yuan to the U.S. dollar.

China’s central bank has recently stressed the yuan’s stability compared with a basket of currencies, but after many years in which it was managed against the dollar, investors are hesitant to accept the change in the absence of more details about how the central bank will manage the currency.

Reporting by Beijing Monitoring Desk; Editing by Nick Macfie, Robert Birsel

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