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China's yuan ended two notches lower at 8.2774 against the US dollar yesterday due to a slight increase in hard currency demands by importers, dealers said.
The yuan moved in a tight range of 8.2771 to 8.2775. Turnover, a thin US$270 million on Friday, was not immediately available.
The yuan is not freely convertible on the capital account and its exchange rate movements are affected mainly by demand from trading companies.
"Importers bought more dollars on the market today, helping push the yuan down slightly," said a domestic bank dealer.
"But the yuan's fall today did not represent a downtrend."
Dealers said the yuan was likely to move between 8.2770 and 8.2775 in the near term, near the strong end of a government set narrow trading box, buoyed by ample dollar supply on the market due to China's healthy trade surplus over the past few years.
Over the past year, that surplus has kept the Chinese currency near the firm end of the tight range of 8.2760 to 8.2800, enforced by the central People's Bank of China, to guard against shocks to the economy.
Newly appointed central bank governor Zhou Xiaochuan said early this month the yuan's exchange rate was "largely appropriate" and there was no hurry to change it.
Yesterday, the yuan weakened against the Japanese yen to 6.9398 versus 100 yen from 6.8906 on Friday and eased to 8.9609 against the euro from 8.8520. It firmed against the Hong Kong dollar to 1.0610 from 1.0613.
(China Daily April 1, 2003)
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