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China's yuan ended two notches firmer at 8.2772 against the US dollar yesterday in quiet trade as exporters sold dollars.
The yuan moved in a tight range of 8.2771 to 8.2774. Turnover, a thin US$370 million on Monday, 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.
"The yuan has been trading in a very stable range recently," said a domestic bank dealer. "There were no major market-moving factors today." 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 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 a 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 in March the yuan's exchange rate was "largely appropriate" and there was no hurry to change it.
Yesterday, the yuan eased against the Japanese yen to 6.9969 versus 100 yen from 6.9398 on Monday, and slipped to 9.0213 against the euro from 8.9609. It firmed against the Hong Kong dollar to 1.0609 from 1.610.
(China Daily April 2, 2003)
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