The yuan closed up slightly against the dollar on Wednesday after the People's Bank of China set a stronger daily mid-point and banks rushed for funds to meet the latest rise in reserve requirements. Spot yuan closed at 6.5047 versus the dollar compared with Tuesday's 6.5060. The Chinese currency has now appreciated 4.94 percent since it was depegged from the dollar in June 2010, and 1.30 percent since the start of this year.
Before trade began, the PBOC set the yuan's daily mid-point at 6.5074 against the dollar, stronger than Tuesday's 6.5108. The central bank uses the mid-point to express the government's intention for the yuan's movements. Offshore, one-year non-deliverable forwards (NDFs) were bid at 6.3720, down slightly from 6.3770 at Tuesday's close. Their implied yuan appreciation in a year's time edged up to 2.12 percent from 2.04 percent.
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