Chinese central bank rules out sharp fall of yuan

The Chinese central bank has ruled out a sharp drop in the Chinese currency -- the renminbi or yuan -- despite pressure from the US dollar, according to media reports.

Deputy Governor of the People's Bank of China, Yi Gang, said the yuan would remain stable, though with the Chinese central bank cutting interest rates, the market had been betting on the Chinese currency to weaken further, the People's Daily reported on Wednesday.

In spite of the yuan's downward trend, analysts have dismissed the possibility of the currency taking a dive, citing China's huge currency reserves and the havoc a too-weak yuan would cause to the economy.

The rate of China's overall economic growth was still high, the competitiveness of China's economy relatively strong and China's trade still had a big market, the report said.

Yi, who is also a member of the Chinese People's Political Consultative Conference (CPPCC) -- a political advisory body -- noted that there would be a strong push this year towards internationalisation of the yuan.

China would promote currency swap agreements, which some countries and regions might be willing to sign with China this year, according to the realities of the situation, the report noted.