“This surely further eased the short-term depreciation pressure on the yuan,” a trader at an Asian bank said. “I have to say luck was on our side when the dollar was not faring well.”

Prior to market opening, the People’s Bank of China set the midpoint rate at 6.506 per dollar, 0.26% stronger than the previous fix of 6.5232. In the spot market, the yuan opened at 6.5099 per dollar and was changing hands at 6.5098 at midday, 0.02% stronger than the previous close.

Traders reported an equilibrium in market supply and demand, in line with the two-way fluctuations in the currency supported by the authorities.

“If the market continues to engage in dollar-selling activities, there might be a further easing of capital outflows in March,” said a trader at a Chinese commercial bank in Shanghai.

Traders reported increasing dollar sales in the forex market in the past week, as the market moved to price in the prospect of a stable yuan, which may further ease the country’s capital outflows. Onshore one-year yuan/dollar deliverable forwards were quoted at 6.5764 around midday, implying expectations of a slightly bigger depreciation over 12 months than seen in Monday’s close of 6.5736.

The offshore yuan was trading 0.06 percent softer than the onshore spot at 6.5138 per dollar. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan’s value, traded at 6.6845, or 2.67% weaker than the midpoint.