New York Fed President William Dudley said on Wednesday that the yuan devaluation is probably appropriate.

"Obviously if the Chinese economy is weaker than maybe what the Chinese authorities anticipated, it's probably not inappropriate for the currency to adjust in consequence to that weakness," he said, adding that the Fed closely monitors decisions of China's central bank.

Dudley noted the U.S. companies should invest in workforce development, saying that the Fed' monetary policy cannot solve skill mismatches.

New York Fed president said nothing about the timing of the interest rate hike.