Chinese Premier Li Keqiang said Tuesday there was no basis for the yuan currency to weaken further and the exchange rate would be maintained at a "basically stable" level, state media reported. Li made the comments in talks with Bakytzhan Sagintayev, Kazakhstan's first deputy prime minister who was visiting Beijing, the official Xinhua news agency said. The exchange rate would be kept "basically stable at an adaptive and equilibrium level", Li said.
The People's Bank of China (PBoC), the central bank, shocked global financial markets on August 11 by devaluating the currency by almost two percent. Authorities described the move as a market reform. Many economists and investors, however, saw it as a way to boost exports by making goods cheaper overseas. They speculated that it meant authorities were concerned economic growth was slowing too rapidly. Li on Tuesday described the move as an "appropriate response" to developments in international financial markets, Xinhua reported.
"Such adjustment was also made as part of China's ongoing reform efforts," he said. The PBoC itself moved to reassure markets, telling reporters two days after the devaluation that Beijing would keep the currency stable. Kazakhstan's currency, the Kazakh tenge, plunged last week after authorities shifted to a free floating exchange rate as the energy-rich Central Asian nation is challenged by lower oil prices.