THE market value of the Chinese currency, the renminbi, appears to have stabilised after frenetic trading pushed it down to about 10.2 yuan to the US dollar two weeks ago.
The swap market rate in Beijing is currently around 8.3 yuan to the dollar and most analysts expect it to remain at that level, or strengthen slightly against the dollar, in the next few weeks.
The official exchange rate is still only 5.78 yuan to the dollar.
Analysts say the great renminbi sell-off, which started in late December, was triggered by rumours that the government was about to significantly devalue the currency and by a massive increase in the demand for dollars in the run-up to the Chinese New Year.
''There is always a tremendous buying spree right before the New Year, and that certainly contributed to the demand for dollars,'' a Western banker in Shanghai, one of China's main currency trading centres, said yesterday.
Now that the New Year has passed and the government has issued a very forceful statement denying any intention of drastically devaluing the currency, analysts say the market has calmed down considerably.