China tells IMF it will not devalue the yuan

China has no intention of devaluing its currency to push up exports nor any plans to enter into a currency war, Premier Li Keqiang assured the managing director of the International Monetary Fund, or IMF, Christine Lagarde, in a telephonic conversation.

The discussion on Thursday followed an IMF request to Beijing to improve communication on its economic policies with the market, Chinese media reported.

Addressing concerns over the depreciation of the Chinese currency, Li reiterated there is no basis for a continued devaluation of the yuan and denied China was reducing the value of its currency to boost weakening exports.

China exercises tight control over the renminbi exchange rate, setting a daily reference rate, and only allowing for a maximum fluctuation of 2 percent.

Some analysts interpret yuan devaluation as an attempt by the country to boost its slowing economy, while Beijing argues it is a way to gauge its currency against the dollar.

Li also assured Lagarde, China will increase communication with the market to “keep the RMB exchange rate basically stable at an adaptive and equilibrium level” and requested the IMF head to repose confidence in the Chinese economy despite the slowdown.

Li said China was capable of maintaining stable and sustainable growth, a week after it was revealed the Asian giant’s GDP grew 6.9 percent in 2015, its lowest ever in 25 years.

The discussion between Li and Lagarde comes shortly after the IMF’s quota reforms that gives greater say to emerging economies including China take effect, and at a time when Lagarde is looking for support to renew her tenure as head of the financial institution.

However, it is unknown if the Chinese premier offered to endorse Lagarde, who has already received backing from several European governments, as also from Japan and Brazil.