SHANGHAI: China’s yuan was little changed on Monday, trading in a tight band near a 14-month high after the central bank again set a weaker-than-expected fixing, a sign policymakers are wary of a rapid rise of the Chinese currency. Prior to the market opening, the People’s Bank of China set the midpoint rate at 7.0572 per dollar, 165 pips weaker than a Reuters’ estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day. The PBOC has been consistently setting the midpoint rate weaker than expected since late November. The spot yuan opened at 7.0408 per dollar and was last trading at 7.041 as of 0207 GMT, just 2 pips lower than the previous late session close. Market participants said activity is likely to stay light as global markets head into the Christmas holiday period. China left benchmark loan prime rates (LPRs) unchanged for the seventh consecutive month in December on Monday, matching market expectations. Analysts at CICC expect the yuan to stay broadly firm in the near term on seasonal support. Implied volatility in the onshore options market remains near this year’s lows, reinforcing steady appreciation expectations. Exporters tend to convert their foreign income into yuan before year-end to pay salaries, repay loans and distribute profits. The offshore yuan traded at 7.0355 yuan per dollar, down about 0.01% in Asian trade. The dollar index, which measures the greenback against six major currencies, was 0.090% lower at 98.61. Analysts at Nanhua Futures said the yuan’s gains reflect a mix of passive appreciation on a softer dollar, stronger demand for renminbi assets, and support from steady policy expectations.