The Chinese yuan strengthened against U.S. dollar in the Asian session on Monday, as China's central bank pumped liquidity into market.

The People's Bank of China injected CNY 200 billion via a one-year Medium-Term Lending Facility on Monday. The rate was lowered by 10 basis points to 3.15 percent.

The PBoC also injected CNY 100 billion through seven-day reverse repos at an interest rate of 2.4 percent.

The yuan rose to a 4-day high of 6.9719 against the greenback from Friday's closing value of 6.9858. Further rally may take the yuan to a resistance around the 6.8 area.

The People's Bank of China set today's central parity rate of the yuan at 6.9795 per dollar, compared to Friday's rate of 6.9843. The Chinese central bank sets central parity rate every morning and allows the yuan to fluctuate up to 2 percent from that level.

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