SHANGHAI: China's yuan closed higher on Tuesday as aggressive buying by a major state bank raised suspicions of central bank intervention, dealers said.
The yuan closed 0.1 percent firmer at 6.2480 to the dollar. A trader in Shanghai said Bank of China , one of China's "big four" state-owned commercial banks, aggressively sold dollars in morning trade, pushing the yuan higher. Traders also said corporate demand for dollars had been weak for the past two days.
The central bank had set its midpoint virtually flat at 6.3078 versus the dollar, compared with Monday's fix of 6.3071. The yuan is allowed to diverge 1.0 percent either side of the mid-point.
In recent weeks, heavy yuan buying by the Bank of China has fed speculation that it could be intervening on behalf of the People's Bank of China (PBOC), the country's central bank.
The yuan has rallied 2.4 percent since weakening to 6.3967 on July 25, its weakest level for the year so far.
The rally has caused many Chinese importers and exporters to reduce long dollar positions built up earlier in the year, when the yuan was depreciating, and most exporters prefer to sell their dollar receipts quickly, analysts say.
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