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China's yuan slipped a notch against the US dollar to 8.2771 yesterday, but dealers said they expect the Chinese currency to remain firm in the short term.
The yuan was shackled to a tight range throughout the session, trading between 8.2768 and 8.2771, with turnover rising to an active US$700 million from US$580 million on Tuesday.
Dealers said they expected the yuan to remain near the firm end of its usual government-enforced trading band due to China's substantial trade surplus and strong foreign direct investment.
The central People's Bank of China keeps the yuan at between 8.2760 and 8.28 to the dollar to guard against shocks to the economy.
China's current account surplus surged a year-on-year 167.3 percent during the first half of 2002 to US$13.63 billion, buoyed by strong growth in exports, official figures showed. Its foreign exchange reserves were US$258.63 billion at the end of September.
The government requires domestic traders to sell most of the hard currency they earn to domestic commercial banks designated to trade on the Shanghai-based national foreign exchange market.
(china.org.cn November 7, 2002)
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