China will strengthen guidance on market expectations and guard against the risk of exchange rate overshooting to keep the yuan broadly stable, the country's central bank said, according to a report by Financial News, a newspaper backed by the People's Bank of China.

A senior official from the central bank's monetary policy department said China's macroeconomic fundamentals remain sound, with the country's balance of payments expected to stay broadly balanced on its own, providing a solid foundation for medium and long-term currency stability.

Multiple factors affect exchange rate movements, according to the official, and the PBOC will continue to let the market play a decisive role in the formation of the yuan's exchange rate and maintain its flexibility.

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The central bank will "strengthen expectation management and guard against the risk of exchange rate overshooting" to keep the yuan's value generally stable at a reasonable and balanced level, the report said.