The yuan ended two notches stronger at 8.2764 per US dollar on Tuesday, near the stronger end of its managed trading range. The one-year non-deliverable dollar forward discount versus the yuan was at 3,550 points implying a rate of 7.923 yuan per dollar in 12 months' time.
NDFs are a transaction where a forward price is agreed between a customer and a bank, but settlement on the value date is undertaken entirely in US dollars.
One-year implied yuan volatility was traded at 8.00/9.00 percent on Tuesday.
Implied volatility is a measure of how much the options market expects the price of the underlying asset to move during the life of the option.
The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank.
Turnover climbed a tad to $1.4 billion on Tuesday from $1.2 billion previously. The yuan firmed to 7.8329 against 100 Japanese yen from 7.8455 on Tuesday, and strengthened against the euro to 10.6910 from 10.7237.
China's central bank drained 17 billion yuan ($2.1 billion) from the banking system on Tuesday via the sale of short-term bills and entering into repurchase agreements.