Yuan little changed on PBOC guidance, seen trading narrowly

SHANGHAI: China's yuan barely moved on Wednesday after the central bank kept its official midpoint almost flat.

The People's Bank of China set the midpoint rate at 6.1158 per dollar prior to market open, almost unchanged from the previous fix at 6.1155.

The spot market opened at 6.2079 per dollar and was changing hands at 6.2087 at midday, only 3 pips weaker from the previous close.

The PBOC has been using its daily fixing and market interventions to maintain stability in the yuan since mid-March as the government has pledged to maintain a steady exchange rate to cushion a slowdown in the world's second-largest economy.

Thanks to the central bank's efforts, China saw net capital inflows of around $20 billion in the first five months of the year, its forex regulator said on Wednesday. The data helps dispel worries about possible capital flight arising from heavy outflows in the first quarter.

As such, the yuan is likely to continue trading narrowly in the near term as the market awaits a change in Beijing's stance towards the currency, traders said.

Offshore yuan was trading 0.02 percent weaker from the onshore spot rate at 6.2097 per dollar.