SHANGHAI: China's yuan edged down against the dollar on Monday after the central bank fixed a slightly weaker midpoint, but traders said any sharp correction would be suppressed by the central bank. Spot yuan was trading at 6.0522 per dollar at midday, falling 0.03 percent from 6.0502 at Friday's close, after the People's Bank of China (PBOC) set its midpoint at 6.1083, down 0.07 percent from Friday's 6.1041.
Traders said December and 2013 economic data published by the government on Monday had no impact on trading as the yuan's exchange rate remained in the tight grip of the central bank.
China's annual growth eased to 7.7 percent in the fourth quarter as investment and demand flagged late in the year, and analysts say it could cool further in 2014 as Beijing focuses on rebalancing the economy and other major reforms.
That leaves growth in the Chinese economy at 7.7 percent for all of 2013, unchanged from revised levels in 2012.
Unless the PBOC changes its tactics, the yuan is likely to move narrowly around 6.05/dollar ahead of the Chinese Lunar New Year holiday, which falls on Jan. 31 and will last for a week, traders said.
In the longer term, however, many market watchers expect the yuan to gain around 3 percent over the course of 2014, similar to its 2.9-percent rise last year, mainly buoyed by continued capital inflows into China.
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