SHANGHAI: The yuan closed down slightly against the dollar on Monday, reflecting concern over faltering economic growth in China, dealers said, but it remained above a year-to-date low set in intra-day trade last Friday. China's economic growth has slowed more sharply than expected in recent months, putting a downward pressure on the yuan, traders said. Spot yuan traded at 6.3450 per dollar at close, slightly weaker than Friday's close of 6.3439 but higher than Friday's intra-day low of 6.3525, the currency's lowest level against the dollar this year. "Dollar purchases have become quite subdued today," said a dealer at a European bank in Guangzhou. "But people are not willing to build heavy positions in yuan, indicating a lack of confidence in whether the currency could really strengthen in the near term." The dollar index fell 0.5 percent in Asian trade on Monday, staging a correction after it hit its highest level since September 2010, at 82.461, last Friday. The index has still jumped 4 percent so far this month. The yuan has shed 0.5 percent this month and 0.8 percent this year under pressure from a generally strengthening dollar in global markets caused in part by concerns over Greek's future in the euro zone, in part by China's slowing economy. Growth in China's gross domestic product slowed to a near three-year low of 8.1 percent in the first quarter. Many economists now expect GDP growth could fall below 8 percent in the second quarter. In the latest sign of the slowdown, the combined profits of industrial companies across China fell 1.6 percent in the first four months of 2012 from a year earlier, the National Bureau of Statistics said on Sunday. The decline worsened from a 1.3 percent drop in the first three months. The government has been taking a range of steps to boost growth, announcing over the weekend it will give private capital the same entry standards to the banking industry as other capital. [ID:nL4E8GR0CV. The PBOC has recently set a series of midpoints stronger than the yuan's trading level, as it seeks to keep the exchange rate relatively stable, although it has also signalled that it would tolerate a measured depreciation. The midpoint is the central bank's base rate from which the yuan can rise or fall by 1 percent on a given trading day. "Similarly to the way it was recently letting the yuan appreciate, the PBOC is now permitting moderate yuan depreciation, while controlling the pace," said a dealer at Chinese commercial bank in Shanghai. Offshore one-year non-deliverable yuan forward contracts continued to trade at a premium to the spot price, changing hands at 6.4020 in the afternoon session for a discount of 1.22 percent to Monday's midpoint. Offshore spot yuan was trading around 6.3420 in morning trade, largely in line with the onshore spot yuan trend.

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