shanghai nov 25 reuters  chinas yuan strengthened against the dollar on thursday underpinned by continued yearend corporate demand for the local currency but some economists expect beijing to start reining in the currencys rise amid concerns about its impact on exports prior to market opening the peoples bank of china pboc set the midpoint rate at 63980 per dollar 77 pips weaker than the previous fix of 63903 in the spot market the onshore yuan opened at 63922 per dollar and was changing hands at 63882 at midday 39 pips firmer than the previous late session close traders said demand for the yuan remained strong as companies sought to convert their dollar receipts into the local currency they expected the trend to continue for now supporting the yuan chinese companies traditionally have higher demand for the local currency towards yearend for various payments some currency traders said the recent yuan rally has also inspired companies to sell the greenback to limit exchange rate losses however some economists said the stronger yuan might not be sustainable as it could start to bite chinas export competitiveness prompting authorities to curb its strength due mainly to concerns about being labelled a currency manipulator the pbocs net purchase of fx is just zero since the beginning of 2020 despite massive inflows of fx via the current and financial accounts lu ting chief china economist at nomura said in a note the strong yuan  will result in a major backlash for future exports we expect beijing to be forced to revisit the case of yuan strength in the next couple of months premier li keqiang acknowledged this week that chinas economy faced new downward pressures saying china should step up efforts to stabilise six key areas including employment financing trade and investment he also said china should seek to guarantee peoples livelihood the development of market entities and the countrys food and energy security nl1n2sd0r6 by midday the broad dollar index stood at 96733 while the offshore yuan was trading at 63917 per dollar divergence of the dollaryuan exchange rate negative number indicates that spot yuan is trading stronger than the midpoint the peoples bank of china pboc allows the exchange rate to rise or fall 2 from official midpoint rate it sets each morning figure reflects difference from pbocs official midpoint since nondeliverable forwards are settled against the midpoint  reporting by winni zhou and andrew galbraith editing by ana nicolaci da costa