Turnover at the Shanghai-based China Foreign Exchange Trade System has continued its decline since the start of the year, dropping to US$4.15 billion last month. Analysts attributed the fall to Beijing allowing domestic enterprises to retain part of their foreign-exchange earnings, slower external growth and enterprises holding back from hard-currency trading in light of yuan uncertainties. Last month's volume was down from about US$4.5 billion in June and compared with the monthly average of US$5.21 billion in the first six months. Despite slower transactions, an official at Shanghai's foreign-exchange market said the trading volume for last month was within the market's normal trading levels. Last month's breakdown was US$3.94 billion, HK$1.28 billion and 6.27 billion yen (about HK$332.21 million). Standard Chartered Bank senior economist Liao Qun yesterday said the slowdown in hard-currency trading could be prompted by enterprises' unwillingness to sell foreign exchange amid the yuan's weakness to the dollar. In November, Beijing allowed mainland enterprises with foreign trade to hold 15 per cent of their foreign-exchange earnings, to ease upward pressure on the yuan at that time. Unofficial figures have it that as much as US$20 billion in hard currencies was being held in the corporate sector, he said.