Morris Obstfeld, chief economist at the International Monetary Fund, said on Tuesday that he was not worried about the ability of the Chinese government to defend its currency, despite the recent depreciation of the yuan.

"No, I don't think this is a problem," Obstfeld said when asked about the problem on the sidelines of a press conference at the annual meetings of the IMF and the World Bank in Bali.

But Obstfeld also said that Beijing will face a "balancing act" between actions to foster growth and ensure financial stability.