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China confident of keeping yuan stable - governor

SHANGHAI, May 28 (Reuters) - China is confident of keeping the yuan basically stable, Yi Gang, the governor of the People's Bank of China (PBOC) told a meeting recently, according to a state media report on Tuesday.

The yield gap between Chinese and U.S. 10-year government bonds is in a relatively comfortable range, Yi was quoted as saying by the Financial News, a publication owned by the central bank.

The Financial News said the governor's remarks were made at a meeting on May 18 in Beijing.

Yi said the likelihood of further interest rate hikes by the U.S. Federal Reserve has reduced, which should help keep the yuan stable, the newspaper reported.

The central bank chief also said China's benchmark rates are now at appropriate levels. (Reporting by Vincent Lee, Winni Zhou and Andrew Galbraith Editing by Shri Navaratnam)