China dismisses concerns over yuan's devaluation

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China's central bank on Tuesday dismissed concerns over yuan depreciation after the currency's entry to the IMF's Special Drawing Rights (SDR) basket.

"There is no basis for continued yuan depreciation, and China is capable of keeping the currency basically stable at a reasonable level," central bank vice governor Yi Gang told a press conference, citing high-medium growth and foreign exchange reserves as major factors underpinning the currency.

"In case of drastic fluctuation or abnormality in international balance of payments and cross-border capital flow, the central bank will not hesitate to intervene," Yi added.

The International Monetary Fund will include the Chinese currency to its SDR basket from Oct. 1, 2016 with a weighting of 10.92 percent, as the currency has "met all existing criteria." The weighting of the other currencies in the basket is 41.73 percent for the U.S. dollar, 30.93 percent for the euro, 8.33 percent for the Japanese yen and 8.09 percent for the British pound.

Following the announcement, the central parity rate of the yuan weakened by 11 basis points to 6.3973 against the U.S. dollar on Tuesday, according to the China Foreign Exchange Trading System.

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