Chinese central bank vows to keep yuan stable

The People's Bank of China, the country's central bank, Thursday reaffirmed its commitment to keeping the yuan "basically" stable.
"The People's Bank of China will ... improve the mechanisms for determining the (yuan) exchange rate and keep the (yuan) exchange rate basically stable," the bank said in a statement.
The statement was released at a news conference by central bank governor Zhou Xiaochuan.
China has come under increasing pressure to re-value the yuan, which has been pegged to the US dollar at 8.28 for the past decade.
Although the government has so far withstood calls from its international trading partners to allow the yuan to rise, speculation has been rife that it will allow a revaluation of anywhere between 2.5 and 10 percent.
Many US companies and politicians want the yuan to be re-valued, arguing that Chinese authorities have kept the currency artificially depressed in order to increase the competitiveness of Chinese exports.
US and Chinese officials met recently to discuss a series of forex-related issues as speculation has mounted that Beijing is mulling a possible widening or re-pegging of the currency's trading band.
The government is also known to be considering switching the dollar peg to a basket of currencies that is likely to include the yen and the euro.
In its statement Thursday, the central bank said that "improving the exchange rate mechanism will be a priority for this year" but did not elaborate what this might involve.
It also vowed to "steadily push ahead with (yuan) convertibility on the capital account," an oft-repeated promise for which no timetable has been announced in recent years.
Expectations that a strengthening of the yuan is imminent have been dampened by two consecutive monthly trade deficits so far this year.
February's deficit jumped to 7.9 billion dollars from just 682 million dollars in January, according to the commerce ministry.
China's forex chief recently warned domestic firms against betting on the appreciation of the yuan.
"Betters on the yuan appreciation are likely to pay an enormous price," Xinhua news agency quoted Guo Shuqing, director-general of the State Administration of Foreign Exchange, as saying earlier this week.