The spot dollar against the onshore yuan continues to trade near the extreme low end of the 1 percent band around the official daily fix, while the spot dollar against offshore yuan has broadly traded around 14 basis points below that over the past three months, which "highlights the appreciation pressure on the RMB", said Nomura Securities International Inc in a report.
"While widening the band may trigger appreciation in the short term, we believe this does not mean sharper yuan appreciation against the dollar by the end of year," the report said.
The renminbi has appreciated by 29.3 percent in US dollar terms since it was de-pegged in mid-2005. Moreover, China's current account surplus has shrunk substantially over this period from a peak of 10.1 percent of GDP in 2007 to 2.4 percent in 2012, it said.
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