China to keep yuan 'stable'

China appeared to backtrack Thursday from a pledge made before the G20 summitin Toronto to increase the flexibility in the range of the yuan's exchange rate.

The State Administration of Foreign Exchange, the country's foreign exchange regulator, said it will keep its currency at a "basically stable and reasonable" level.

It added that financial pressure for the yuan to rise is easing due to Europe's debt woes.

Washington and other trading partners complain China's exchange rate controls keep the yuan undervalued, unfairly making its export cheaper.

When Beijing announced in June it would allow more flexibility, it also ruled out any big changes.

Market pressure for a stronger yuan grew earlier this year as investors bought more American dollars as they piled into U.S.-denominated short-term notes as a refuge against the growing European debt crisis.

But the Chinese regulator said in a statement that pressure had eased since May.

Yuanup since June

The yuan has gained about 0.8 per cent against the U.S. dollar since Beijing's June announcement.

It has risen rapidly against the euro as Europe wrestles with its debt crisis, gaining 4.5 per cent since the start of June and 14.2 per cent so far this year.

The Chinese government has rejected complaints the yuan is undervalued and said it is at an appropriate level.