Wen made the remarks after talks with Chancellor Angela Merkel on the second leg of a European tour dominated talks on a response to the crisis ravaging global economies.

"In light of the current economic situation, we are of the opinion that the exchange rate of the renminbi (yuan) is being maintained at a reasonable and balanced level," Wen told reporters.

He acknowledged that global currencies were facing dramatic fluctuation -- comparing the ups and downs to a "rollercoaster" -- but sharply rejected charges that China was exercising undue influence over exchange rates.

"The fault is not with China," he said.

His comments came amid fears of fresh tension between China and the United States under the new administration of President Barack Obama.

During his confirmation hearings as US treasury secretary last week, Timothy Geithner said Obama suspected that China was manipulating its currency to help its exports -- a constant source of friction between the countries.

Obama's new administration said Monday it would determine in the coming months whether the accusations were accurate and had not yet decided on its policy on the issue.

Wen and Merkel said they agreed that protectionism must not be the answer to national economic troubles and pledged closer coordination on economic, trade, monetary and finance policy in fighting the downturn.

The two sides also signed a memorandum of understanding on climate protection with greater cooperation on energy, research and technology.

After his talks in Berlin with Merkel, Wen was to take part in a German-Chinese economic forum before heading to European Union headquarters in Brussels as well as Spain and Britain.

On Wednesday he had been at the World Economic Forum in Davos, Switzerland talking about the worsening state of the world economy.

The premier is on his first European trip since Beijing put off a planned summit with the EU in December in protest at French President Nicolas Sarkozy's decision to meet the Dalai Lama, Tibet's exiled spiritual leader.

France held the rotating EU presidency at the time.

Relations between Germany and China soured in September 2007 after Merkel met the Dalai Lama, whom China regards as a dangerous separatist, prompting Beijing to suspend an ongoing bilateral dialogue on "the rule of law" that only recently resumed.

Merkel renewed her call for China to hold dalks with the Dalai Lama and offered Germany's help if the country could make a "constructive contribution" to a resumption of dialogue.

Germany's justice minister this week praised Beijing's "irreversible" progress on human rights and the rule of law, including reforming capital punishment legislation and reining in police powers.

Germany, the world's biggest exporter, enjoys lucrative trade relations with China.

It sold 31.3 billion euros' (41.0 billion dollars) worth of goods to China in the period from January to November 2008 -- a 14-percent rise compared to the year before -- with demand particularly high for machines, cars and electricity generators.

During the same period, German imports of Chinese products rose 5.6 percent to 54.3 billion euros in trade driven by demand for computers, radios, television sets, toys, furniture and jewelry, according to German data.

But the global economic crisis has seen orders collapse, leading to gloomy forecasts for the world's number three and four economies.

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