Robust dollar demand

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SHANGHAI: The yuan edged lower on Monday despite the central bank setting a firmer official guidance rate, as traders reported robust dollar demand from industrial companies.

"There was a bout of heavy dollar buying right after the trade open," said a trader at a Chinese commercial bank in Shanghai.

"And the trend continued while state banks were believed to stay on the sidelines.

" As the economy slows, damping investment opportunities at home, Chinese companies have rushed to buy overseas assets this year and that has increased their dollar demand in the domestic market, traders said.

The People´s Bank of China set the midpoint rate at 6.4787 per dollar prior to market open, 0.19 percent firmer than the previous fix of 6.4908, reflecting Friday´s dollar slide.

The dollar index that tracks the greenback against a basket of major currencies had slumped 0.2 percent on Friday before recovering some losses in Monday´s Asian trade.

The spot market opened at 6.4770 per dollar and was changing hands at 6.4812 at midday, easing 0.16 percent from the previous close.