The yuan has strengthened in both the black and official markets despite mounting overseas expectations of a devaluation later this year or early next year to help reflate the economy.
Currency touts said the yuan was worth 8.65 yuan (about HK$8.06) to 8.70 yuan to the US dollar - its strongest level in the black market this year - compared with its high of nine yuan a year ago, when fears of a devaluation sparked robust demand.
'There is no rush to buy US dollars, especially since the stock markets rebounded in late May,' a blackmarketeer said.
Another tout said: 'There will be panic buying of US dollars if people sense there will be a devaluation in the months ahead, but demand has been pretty weak.' In the official market yesterday, the currency closed marginally higher at the post-1994 high of 8.2773 yuan to the dollar.
Mainland economists believe although Beijing is worried by the worsening economic picture, currency devaluation as a policy option has not yet found its way to the official agenda.
They believe how the economy shapes up in the third quarter will provide a useful clue on the kind of policy mix Beijing will adopt in the coming months.
Wang Lingyi, economist at the Shanghai Academy of Social Sciences, said: 'I sense the mainstream thinking in government now is still to leave the yuan as it is, instead of succumbing to pressure to devalue.
