China's central bank is seen as favoring a two-way fluctuation in the yuan's rate rather than have it move up only, analysts said, as the currency posted the strongest rise in three months last week and in the process halted a one-month decline.

The yuan rose 0.5 percent last week to 6.8333 to the US dollar on Friday in Shanghai , from 6.8700 a week earlier, according to the China Foreign Exchange Trade System.

The rise marked the yuan's biggest weekly advance since May 23. The currency has dropped for 25 trading days and climbed for 14 trading days, indicating that the central is more willing to see a two-way fluctuation in the yuan.

Tommy Xie, an OCBC Bank economist, said the yuan's long-term appreciation trend is not affected.

(Shanghai Daily August 25, 2008)