HONG KONG: China's yuan held steady against the dollar on Monday following a weaker official midpoint, with the market awaiting a run of economic indicators this week to gauge growth momentum in the world's second-largest economy.
Spot yuan changed hands at 6.2118 near midday, slightly weaker than Friday's close of 6.2113. It traded in a tight range of 6.2094 and 6.2142 in the morning.
The People's Bank of China (PBOC) set the yuan midpoint at 6.1531, the weakest level in the past five trading sessions, compared with 6.1495 previously.
"We saw client demand to sell dollars in the morning and if the central bank does not intervene in the market today, the dollar has room to fall," said a trader at a Chinese bank in Shanghai.
Investor appetite to hold the yuan and Chinese assets has been greatly dampened by a sharp depreciation in the currency that was engineered by the central bank to shake out hot money, and also due to a slew of weak economic data so far this year.
China's exports unexpectedly fell for the second straight month in March and import growth dropped sharply, intensifying concerns about weak manufacturing and slowing growth.
The market has been rife with speculation about a fresh round of stimulus from Beijing, but Chinese officials have played down expectations as they believe these measures tend to be less efficient than market forces in boosting growth.
China will release first-quarter gross domestic product (GDP) data on Wednesday. A Reuters poll of 25 economists showed the economy is expected to have grown at its slowest rate in five years in the January-March quarter.
Growth is forecast at 7.3 percent from a year earlier, lower than the 7.7 percent in the final quarter of 2013. It would be the slowest annual growth since the first quarter of 2009, in the immediate aftermath of the global financial crisis, when GDP grew 6.6 percent.
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