SHANGHAI: China's yuan barely moved on Monday after the central bank kept the official guidance rate near unchanged and some state-owned banks were suspected of selling dollars to support the yuan.
The People's Bank of China (PBOC) set the midpoint at 6.1197 per dollar prior to market open, only 0.01 per cent weaker than the previous fix at 6.1192.
The spot market opened at 6.2090 per dollar and was changing hands at 6.2095 at midday, unchanged from the previous close.
There were signs of some big state-owned banks, which traders believed were guided by the central bank, selling dollars in the morning, offsetting the pressure from a recent increase in corporate demand for dollars.
Their dollar sales, along with the flat midpoint fixings recently, are a signal of the government's intention to keep the yuan stable for now, traders said.
Therefore, the yuan was seen likely to trade in the range of 6.18-6.22 per dollar in the short term - the narrow band that it has moved within in recent months.
China's persistent economic slowdown and more recently, its stock market rout, has exerted downward pressure on the Chinese currency.
Offshore yuan at 6.214 per dollar was trading 0.07 per cent weaker than the onshore spot.
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