China needs to eliminate market expectations of continued currency depreciation, the head of its central bank admitted on Friday as he argued that the country had ample foreign exchange reserves despite recent depletions.

Beijing has raided its reserves in order to shore up the currency amid jitters that have led to capital flight. Since peaking at almost $4tn in 2014, China’s foreign exchange reserves have fallen about 17 per cent to $3.33tn, with outflows accelerating in recent months.

But in a rare public relations offensive ahead of a meeting of G20 finance ministers and central bankers in Shanghai, Zhou Xiaochuan attributed these fears to the private sector.

“Thus it is particularly important to stabilise the market expectation on the [renminbi’s] exchange rate,” he said, adding that “as long as our economic fundamentals are sound . . . market expectation[s] will become more rational”.

Many analysts believe the People’s Bank of China is caught in a downward spiral. They argue that by spending the country’s foreign exchange reserves to cushion the renminbi’s fall against the dollar, it is simply reinforcing expectations that both the overall level of reserves and renminbi-dollar exchange rate will continue to decline.

Mr Zhou’s speech and press conference is one of the highlights of the two-day G20 session, which finishes on Saturday. China’s longest-serving central bank governor has largely avoided international forums and media since the PBoC’s “one-off” renminbi devaluation rocked international markets in August.

China’s blue-chip CSI 300 index was up slightly on Friday after tumbling more than 6 per cent a day earlier, while the renminbi held steady against the dollar.