Chinese central bank keeps yuan in check

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The yuan edged up yesterday, but optimism about China's currency revaluation was tempered by further signs of official moves to maintain a grip on gains.

Large local banks seemed to be acting for the People's Bank of China by purchasing US dollars and thus keeping the yuan's gains in check, traders said. The moves suggest that Chinese central bankers are keeping a close watch, and indeed control, on the yuan's movements, despite allowing more two-way trading since abandoning the de facto dollar peg over the weekend.

The yuan closed at 6.8124 to the dollar, booking a 0.02 per cent gain on Tuesday's close of 6.8136. The currency is up 0.2 per cent on the week, and earlier touched a post-revaluation high of 6.7900 against the greenback amid volatile trading.