China's yuan was flat against the dollar on Tuesday after the central bank set the official guidance rate almost unchanged, sending a message that monetary authorities wish to see the currency steady for the moment, traders said. The People's Bank of China set the midpoint rate at 6.1177 per dollar prior to market open, 0.01 percent weaker than the previous fix 6.1169. The spot market opened at 6.2096 per dollar and was changing hands at 6.2097 at midday, unchanged from the previous close.
China's economy is slowing, exerting downward pressure on the yuan. More recently, the country's volatile stock market has added uncertainty about the value of yuan-denominated assets, pushing the authorities to take measures to try to keep the currency steady, traders say. The Chinese currency is likely to continue to move narrowly around 6.21 in the short term, a research report by China Guangfa Bank said on Monday. In a related development, China's Ministry of Commerce said on Tuesday that the country's import growth is likely to remain at a low level.
China's export sales unexpectedly rose for the first time in four months in June and imports fell again but posted their best performance this year, causing some optimism that tepid trade flows were picking up. The offshore yuan was trading 0.13 percent weaker than the onshore spot at 6.2176 per dollar.