The sharp sell-off in Chinese stock markets is close to ending and the yuan will not need further devaluation, according to the head of the country’s central bank.

Zhou Xiaochuan, governor of the People’s Bank of China, told finance ministers and fellow central bank governors at the G20 meeting in the Turkish capital Ankara that he had plans to calm the country’s financial markets even as the US prepares to raise interest rates

“At present, the exchange rate of the yuan against the dollar tends to be stable, and most of the correction of the stock market has taken place, so the financial market is expected to be more stable,” a statement released on the central bank’s website said.

At the same time the Chinese finance minister Lou Jiwei told G20 delegates that he expects the country’s economy to grow at around 7 per cent for the next four to five years, saying that was the “new norm”. He tried to defuse worries about the slowdown in Chinese economic activity, saying Beijing is “not especially concerned” about short-term fluctuations and will stick to its reform plans.

China’s stock market, as measured by the Shanghai Composite index, has fallen more than 40 per cent from its peak in mid-June. That was compounded by the country’s surprise decision to devalue the yuan in the middle of August. The government has spent around £150bn on measures to support the market and deter short-term speculation.

Mr Lou said government spending will rise 10 per cent this year, more than the 7 per cent budgeted for at the start of the year. He added that he will raise dividend payments from state-owned enterprises to make up for any shortfalls.

China, said Mr Lou, can no longer rely on policy support to achieve overall growth of up to 10 per cent, as it may already take several years to digest excess industrial capacity and inventories. The country will go through “labour pains” in the next five years as it aims to complete its main structural reforms by 2020.