100 Yuan notes, featuring a portrait of late communist leader Mao Zedong (File photo)
China's central bank says it will not buckle under foreign pressure to reform its foreign exchange rate. China is trying to douse market speculation of an imminent currency revaluation.

A senior official from the People's Bank of China says China will not be pressured to change the pace of its currency reforms.

The comments by vice governor Wu Xiaoling were made to a Japanese newspaper in late April, but were just posted on the bank's website on Thursday.

The remarks appear to be aimed at speculators and the United States. On Wednesday, erroneous reports of an imminent yuan revaluation caused a brief sell-off of U.S. dollars.

The Chinese yuan is pegged at around 8.2 to the dollar. The United States and other Western countries say that makes Chinese products unfairly cheap, causing huge trade deficits with China. The U.S. Congress has threatened to impose hefty tariffs on Chinese goods if Beijing does not move to a more flexible exchange system within months. Beijing has repeatedly said it would institute reforms but has given no timetable.

Thio Chin Loo, currency strategist at BNP Paribas bank in Singapore, says recent events are not likely to change Beijing's position.

"I think China has shown that it does not want to bow down to external pressures in wanting to change its currency regime," she says. "It said that it would consider moving on the exchange rate based on its domestic considerations."

Many financial analysts say China's reluctance is caused by fears that a strong yuan would cut exports and lead to unemployment, as well as hurt its already weak banking system.

Speculation about a yuan revaluation has been rife over the past few weeks. But, on Wednesday it reached a frenzy, triggered by a poorly translated news story in China's state media that indicated a revaluation might come soon.

Late last week, David Eldon, chairman of the international bank HSBC, said revaluing the yuan at this time would not be in China's interest.

"There are a lot of speculators who are sitting on the wings waiting for there to be a revaluation," he said. "If you revalue the currency, who's going to gain from this? It's going to be the speculators. I don't think that that is something that necessarily people want to see."

Beijing has been trying to slow its rapidly growing economy by modestly raising interest rates and controlling the inflow of foreign investments.