BEIJING, Dec 24: China's policymakers are coming under increasing pressure to re-value the yuan as the year draws to a close, with analysts pointing to robust economic growth and a continued decline in the US dollar.

Standard Chartered said its Chinese yuan barometer, which measures pressures on the currency, has risen to 120.4 from 116.8 in November, which is above the upper threshold indicating there is an economic case to re-value.

"Although the Chinese will not be forced into a change by speculators, officials appear to be moving in the direction of accepting the case for such a change," Standard Chartered analysts Stephen Green and David Mann said in a research note.

"We expect China to widen its currency band to plus or minus three per cent and to move at a future date to a trade-weighted basket of currencies." A revaluation of the yuan, which has been pegged at around 8.28 to the US dollar for the last 10 years, would help relations with the United States and indicate China's commitment to market reforms, Standard Chartered said.

Manufacturers and politicians in the United States, one of China's biggest trading partners, have long complained that the yuan is undervalued by as much as 40 per cent, giving Chinese exporters an unfair advantage.

Meanwhile, dealers said non-deliverable forward (NDFs) contracts for one year delivery, the benchmark in the Hong Kong-based proxy market for yuan trading, were being quoted at a discount implying a 6.2 per cent appreciation, a level last seen in October 2003.

China has long stated it wants to make its foreign exchange regime more flexible but it has also consistently declined to give a specific timetable for its plans and some officials have said the country will not make any changes while it is being pressurised to do so.

Dealers the market appears increasingly to believe that Beijing is planning to widen the current narrow trading band in which the currency has moved since 1994. -AFP