China's central bank on Thursday denied reports that authorities plan to devalue the yuan by 10 percent to boost exports, and said the yuan still has the potential to appreciate in the long term.

The yuan fell for a third consecutive day Thursday, with the central parity rate of yuan dropping by 704 basis points to 6.401 against the US dollar, after the People's Bank of China (PBC) Tuesday adjusted the exchange rate formation system to better reflect the market.

The central bank's move came after China's exports fell by 8.3 percent year-on-year in July, reversing an expansion of 2.1 percent in June, which fueled speculation that the yuan move was aimed at boosting exports.

Reuters reported Wednesday that powerful voices inside the government were pushing for the yuan to depreciate almost 10 percent to help stabilize external demand and growth.

Yi Gang, deputy governor of the central bank, told a press conference on Thursday that the report is groundless, and there was no need to devalue the yuan to promote exports.

Ma Jun, chief economist of the central bank's research bureau, also said the market should not read too much into July's export figures. According to the bureau's forecast, China's export growth will rebound in the second half, given the slow global economic recovery.

Meanwhile, China's economic recovery will be mainly driven by real estate and infrastructure investment, he said in an e-mailed statement sent to the Global Times Thursday.

"There is no need for China to initiate a currency war to gain competitiveness," Ma said. "If all economies compete for devaluing the currency, no one will get benefits."

In the mainland spot market, the yuan fell to 6.399 per dollar on Thursday, weakening 0.19 percent from Wednesday and depreciating 3 percent over the past three days.

"The yuan's fluctuation these days is within control, and more importantly, the central bank has the capability to stabilize the exchange rate through direct intervention when necessary to prevent non-rational large fluctuation of the currency," Ma said.

The yuan will remain a strong currency in the long term given China's economic fundamentals including a trade surplus of $305.2 billion in the first seven months of this year, a GDP growth rate of 7 percent in the first half and ample foreign exchange reserves, said Zhang Xiaohui, assistant governor of the central bank.

"The central bank has sent a signal that it does not want the yuan's depreciation to get out of control," Liu Dongliang, a senior analyst at China Merchants Bank, told the Global Times Thursday.

Authorities also want to play down people's expectations of a sustained yuan devaluation, as that assumption will lead to increasing capital outflows, Liu added.

Wang Jiamei contributed to the story