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Updated Thursday, March 11, 2010 11:11 am TWN, Bloomberg

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Yuan forwards little changed

BEIJING -- Yuan forwards were little changed on speculation China will maintain stability in the currency even as a government report showed exports increased by the most in three years. Bonds were little changed.

Overseas shipments rose 45.7 percent in February from a year earlier, beating the forecast for a 38.3 percent gain in a Bloomberg News survey of economists, the customs bureau said Wednesday. The trade surplus shrank to US$7.6 billion from US$14.17 billion, the smallest since February 2009. China has kept the yuan little changed around 6.83 per dollar since July 2008 to help exporters weather a global recession.

Twelve-month non-deliverable yuan forwards traded at 6.6380 per dollar as of 6:27 p.m. in Hong Kong, from 6.6385 Tuesday, according to data compiled by Bloomberg, indicating bets the currency will rise 2.8 percent from the spot rate of 6.8259. The contracts touched 6.6260 on March 8, the highest level in five weeks.

Government bonds were little changed as investors sought to purchase new fixed-income securities at two auctions Wednesday.

The finance ministry sold 26 billion yuan (US$3.8 billion) of seven-year notes at an average yield of 2.92 percent. The auction drew bids for 1.44 times the amount on offer.

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