The yuan should be "relatively stable" this year as the Chinese economy stabilises and becomes "healthier", China's central bank governor has said.
"From what we can see now, the yuan exchange rate... has no basis to continue to devalue," People's Bank of China head Zhou Xiaochuan told reporters, on the sidelines of the annual Parliament session.
The Chinese currency lost nearly 7 per cent of its value last year, recording its biggest full-year drop in value since 1994.
Mr Zhou expects the yuan exchange rate to be stable, given the stabilising economy and the initial results of supply-side structural reforms.
China's economy grew by 6.7 per cent last year, its slowest pace in 26 years, but major indicators pointed to a recovery in growth from the fourth quarter of last year.
"Of course, the foreign exchange market is always very sensitive, and will fluctuate according to the overall global economy, as well as various events happening in China," Mr Zhou added.
The world's No. 2 economy has been selling its holdings of US dollars to prop up the weakening yuan amid an exodus of capital in search of better returns overseas.
In January, its foreign reserves - the world's largest - dipped below US$3 trillion (S$4.25 trillion) for the first time in almost six years.
To Mr Zhou, such a drop is "normal" and markets should not "view it too seriously and overreact".
In a 75-minute press conference flanked by his three deputies, Mr Zhou also addressed the issues of high corporate debts, capital controls, the regulation of personal finance products and the opening of China's bond markets.
He noted that it will be a medium-term effort to bring down China's high corporate debt levels.
"It won't have very obvious results in the short term because the existing stock (of debt) is very large," he said.
While the onus is on the companies to make efforts to control the high leverage, banks should also consider withdrawing support for these firms, he told reporters.
Cutting industrial capacity is also key to lowering corporate indebtedness, and the banks should make extra efforts to support this policy, he added.
According to the Bank for International Settlements, a global financial watchdog, China's total debt stands at around 255 per cent of gross domestic product (GDP), and corporate debt makes up the bulk of it, at 169 per cent of GDP.
It warned in a report last September that China runs the risk of a banking crisis in the next three years.
For now, China needs to first stabilise its overall debt levels before slowly reducing them, deputy central bank governor Yi Gang said at the same briefing.
Asked about the recent move to impose stricter oversight of overseas investment, which some view as a form of capital control, Mr Zhou said that it is necessary and effective in curbing inappropriate investments.
Citing purchases of Hollywood studios and European football clubs as examples, he said that these investments "do not benefit China and (are) not welcomed abroad either".
