After months of silence, China’s central bank chief, has finally broken his silence over Beijing’s currency policy and assured the public there is no basis for the yuan’s continued depreciation. Zhou Xiaochuan, governor of the People’s Bank of China (PBOC), also rejected rumours it would tighten capital controls. In an interview published by mainland financial magazine, Caixin, two days before the mainland’s financial markets reopen on Monday, Zhou addressed concerns over China’s dwindling foreign reserves, which last month fell to the lowest levels since 2012. “It is normal for foreign reserves to rise and fall as long as the fundamentals face no problems,” Zhou said in his first public comments on the bank’s rationale and strategies, in the face of multiple challenges since it devalued the renminbi by 2 per cent in August. READ MORE: Where is China’s central bank chief? Doubts over yuan’s direction grow, but no-one’s seen or heard from Zhou Xiaochuan The PBOC has pumped in money to stabilise the yuan because of pressure following the economic slowdown and continued capital outflow, which has depleted China’s foreign reserves. Holdings fell by US$99.5 billion in January to US$3.23 trillion. “The central bank is neither god nor a magician who can turn uncertainties to certainties ... sometimes, the central bank has to say, ‘Sorry, we have to wait for new data’.” Zhou said China had no intention of tightening capital controls as it would be hard to implement, given the size of China’s international trade and businesses abroad. The level of capital outflow in recent months was normal. “Capital outflow and capital flight are two different concepts.” He said speculators were targeting China and that “China would not let the market sentiment be dominated by these speculative forces”. He also made no mention of billionaire investor George Soros, who has been in a war of words with Chinese state media for weeks after suggesting the mainland’s economy was heading for a hard landing. READ MORE: Communist mouthpiece accuses billionaire investor George Soros of ‘declaring war against China’ The PBOC would be cautious when using resources to fight international speculators, Zhou said. “It does not mean we must take direct action whenever they come,” he said, adding that a more flexible yuan would help China face speculators’ pressure by effectively using “our ammunition while minimising costs”. His remarks could help to stabilise the market and provide global investors with a clearer idea of the central bank’s stance towards the yuan exchange rate, said ANZ Banking senior economist Raymond Yeung Yue-ting. Zhou also responded to criticism of the PBOC’s lack of transparency and poor communication. “The central bank is neither god nor a magician who can turn uncertainties to certainties,” Zhou said. “Sometimes, the central bank has to say, ‘Sorry, we have to wait for new data’.” The bank would use a basket of currencies as reference and carefully manage any daily volatility in the yuan against the dollar, as well as using a wider range of macro-economic data, he said. “The yuan is basically stable against a basket of currencies... there is no basis for devaluation.”