Yuan little changed in special session

China's yuan was little changed against the dollar in the first day of interbank trading after a weeklong national holiday, amid speculation the government might use a special session yesterday to alter the currency's value.

The yuan was at quoted at 8.2764 against the US dollar at 12:37pm in Shanghai trading, compared with the 8.2765 close on the last day of trading on April 30. China has fixed the currency at about 8.3 versus the dollar for a decade and lets it trade within 0.3 percent band around 8.2770.

"It's just trading in a normal range and nothing seems out of the ordinary," said Li Lu, a trader at China Construction Bank (中國建設銀行) in Beijing. Trading ended at 3:30pm yesterday.

China is being pressed by US Federal Reserve Chairman Alan Greenspan, US Treasury Secretary John Snow and Japanese Finance Minister Sadakazu Tanigaki to ease the yuan's peg to the dollar.

Letting the yuan appreciate would give the People's Bank of China, which sells yuan to prevent the currency from strengthening, more scope to raise interest rates to cool an economy that grew at an eight-year high of 9.5 percent last year and at the same pace in the first quarter.

Special weekend trading sessions, scheduled yesterday and on April 30 to make up for lost holiday time, aren't unusual in China. Yesterday's session attracted more than the usual attention after some analysts predicted the government was poised to revalue the yuan.

The speculation was fanned by the yuan's rise on April 29 to its strongest in a decade. The currency briefly touched 8.2700 on that day, a gain of 0.08 percent. The appreciation spurred Frank Gong, chief China economist at JPMorgan Chase & Co in Hong Kong, to predict the government may alter its currency policy as soon as this week.

"I don't believe it will happen until the fourth quarter, but I wouldn't bet my last dollar on it," Tony Norfield, head of foreign exchange strategy in London at ABN Amro Holding NV, said before yesterday's session.

China's Deputy Finance Minister Li Yong said two days ago the government is "working very hard" to revise its exchange-rate system. However, no decision has been made on the format or timing of the revision, Li said in Istanbul, where he was attending the annual meeting of the Asian Development Bank.