Yuan on course to break 6 per dollar barrier in 2014

The yuan is on track to break through the level of 6 per US dollar this year, but the pace of gains is expected to be held back by concerns over China's export slowdown and reduced capital inflows as the United States tapers its monetary stimulus.

The yuan will rise 2 per cent to 5.93 per US dollar by the end of this year, according to the median estimate of nine economists polled by the South China Morning Post.

The forecast gain will see the yuan pass through the psychologically important level of 6 to the dollar for the first time, even as the greenback strengthens against other major currencies.

Last year, the yuan gained 2.9 per cent against the dollar.

The yuan reference rate, the onshore daily fixing rate set by the People's Bank of China, set record highs 41 times last year, helped by a strong trade surplus growth and a notable swing in capital and financial accounts back to a surplus amid the appeal of higher onshore interest rates.

The "redback" would remain the bright spot in regional currency markets this year, experts say, after the yuan stood with the South Korean won as the only gainers against the dollar last year.

But concerns over exports - underscored by a surprise decline in last month's figure - could make Beijing more cautious in allowing the yuan to appreciate too quickly in the short term because of the impact on jobs and exporters.