The People's Bank of China (PBOC) Governor Zhou Xiaochuan has broken his long silence amid vigorous efforts to restore stability to the country's economy and currency, saying there is no basis for continued yuan depreciation.

Zhou made the statement in an interview published on Saturday by Caixin -- just as markets were bracing for another week of volatility following rumors suggesting the yuan is about to take another plunge in value.

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The nation's balance of payments is good, capital outflows are normal and the exchange rate is basically stable against a basket of currencies, Zhou said.

"Speculative Forces"

"International speculative forces have recently focused on shorting China," the central bank governor insisted, blaming uncertainty on a "herd effect."

He said China would not let international speculators dominate market sentiment.

China has no incentive to depreciate the currency to boost net exports, and there is no direct link between the nation's gross domestic product and its exchange rate, Zhou pointed out.

"The country's trade surplus in 2015 was close to $600 billion and net export's contribution to GDP was not so low so there's not motive to depreciate the renminbi for the sake of net export expansion," he said.

China has attempted to buttress its economy by dipping into its foreign currency reserves and flooding the markets with US dollars in a bid to maintain the yuan's value.

The country still retains a massive reserve of foreign currency holdings at $3.23 trillion, but that is China's lowest level in four years and it comes after a decline of $420 billion in as little as six months.

In January, the country's reserves fell by some $99.5 billion as the PBOC sold dollars in an effort to prop up the value of the yuan, according to the BBC.

"No Foundation"

But Zhou dismisses rumors that China plans to tighten capital controls, and said there is no need to worry about a short-term decline in the nation's foreign currency reserves.

"It is normal for foreign reserves to rise and fall as long as the fundamentals face no problems," he said, adding: "We need to differentiate between capital outflow and capital flight."

China's economic slowdown, falling oil prices and financial turmoil have fueled a cycle of decline and panic throughout much of the world, as countries in nearly every continent have reported increasing risks of extended economic slump, political upheaval and financial losses.  

World markets went into a freefall last week when investors pulled their cash from risky assets, wiping off more than $1 trillion from global stocks.  The Shanghai composite was meanwhile closed for the Chinese New Year holiday.

China has stepped up efforts to calm the market and ensure a stable currency, and Caixin's interview of Zhou -- who usually leaves press interviews on China's currency exchange policy to other officials -- has been seen by many as a clear indication that Beijing is fighting to impose some measure of order into the chaos.

"China has the world's largest foreign exchange reserves," Zhou said. "There is no foundation for continued depreciation."

Tagspeople's bank of china, Yuan Depreciation, chinese economic slowdown