The yuan closed up against the dollar for a second day on Thursday after the People's Bank of China set a firmer mid-point, reinforcing expectations the central bank will stick to a policy of yuan appreciation, albeit gradually. Spot yuan close at 6.5039 versus the dollar compared with Wednesday's 6.5047. The Chinese currency has now appreciated 4.95 percent since it was depegged from the dollar in June 2010, and 1.31 percent since the start of this year.
Before trade began, the PBOC set the yuan's daily mid-point at 6.5048 against the dollar, stronger than Wednesday's 6.5074. The central bank uses the mid-point to express the government's intention for the yuan's movements. Offshore, one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3700, almost flat from 6.3670 at Wednesday's close. Their implied yuan appreciation in a year's time was at 2.11 percent compared with 2.16 percent.