A senior Chinese central bank official said the yuan's current level is "appropriately aligned" with economic and market fundamentals, pushing back against accusations that China was manipulating the currency to gain international trade advantage, Reuters reported.
The U.S. officially labeled China as a currency manipulator last week after the country allowed the yuan to fall below the 7-per-dollar threshold for the first time in 11 years in response to President Donald Trump's trade conflict escalation earlier in August.
But recent movements in the yuan were normal market reaction to trade tensions, according to Zhu Jun, head of the People's Bank of China international department. The official told Reuters in an interview that preventing such volatility in the yuan "would constitute real manipulation."
Zhu also said fluctuations in the yuan's value would not necessarily fuel "disorderly" capital flows as long as the currency movements were based on market supply and demand.
Zhu assured that China can "navigate all scenarios" stemming from the currency manipulator tag given by the U.S. and that the yuan will be a "strong currency" over the medium and long term.
PBoC Vice-Governor Pan Gongsheng wrote in an Aug. 12 newspaper article that the central bank will not resort to devaluing the yuan as a trade war weapon, vowing to keep the currency's exchange rate "basically stable," the South China Morning Post reported.