SHANGHAI: China's yuan steadied against the US dollar on Monday, with investors undeterred by weaker-than-expected April activity indicators as authorities signalled intentions to keep the currency market stable.

The People's Bank of China set the midpoint rate at 6.8852 per dollar prior to the market open, 96 pips or 0.14 percent firmer than the previous fix of 6.8948.

Monday's fixing was much firmer than market expectations, traders said, leading to speculation that the central bank might be reinforcing signls that it wants the yuan stable during the two-day Belt and Road Forum, which ends on Monday.

Chinese authorities usually try to avoid any volatility during major political and economic events.

In the spot market, the yuan opened at 6.8990 per dollar and was changing hands at 6.9000 at midday, only 7 pips weaker than the previous late session close and 0.21 percent weaker than the midpoint.

The spot yuan was hovering around 6.90 per dollar level, with traders seeing no significant activity either side of the market by major state-owned banks.

"There was not much corporate dollar demand in morning trade. But as month-end is approaching, demand for the US currency might pick up soon," said a trader a foreign bank in Shanghai.

Premier Li Keqiang reiterated over the weekend that prudent monetary policy will be maintained and the yuan currency will be kept basically stable, according to a statement issued by the foreign ministry.

The yuan was little affected by weaker-than-expected April factory output data released on Monday morning.

China's factory output growth cooled, rising 6.5 percent in April from a year earlier, while fixed-asset investment grew 8.9 percent in the first four months this year - both outcomes were worse than expectations.

The index for the yuan's value based on the market's traded-weighted basket edged up slightly to 93.06 last Friday, 0.06 percent higher than a week earlier, according to official data from the China Foreign Exchange Trade System (CFETS).

The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 93.95, weaker than the previous day's 94.12.

The global dollar index fell to 99.17 from the previous close of 99.252.

The offshore yuan was trading 0.02 percent weaker than the onshore spot at 6.9011 per dollar.

Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 7.0865, 2.84 percent weaker than the midpoint.

One-year NDFs are settled against the midpoint, not the spot rate.