The yuan closed weaker against the dollar on Monday, but at the strongest level permitted by the official daily trading band, having stayed there for most of the day amid dwindling trade as the central bank keeps a lid on pressure for the yuan to firm.

Volume picked up in afternoon trade, and the yuan fell as far as 6.2349. In the end, however, the Chinese currency closed where it opened, at 6.2279 per dollar, slightly weaker than Friday's close of 6.2267. The People's Bank of China (PBOC) set Monday's midpoint at 6.2908, slightly weaker than Friday's midpoint of 6.2892, ensuring the spot market would also weaken. The yuan can only rise or fall 1 percent from the central bank's base rate each day.

Copyright Reuters, 2012