As the yuan plumbs new lows against the dollar, China's currencyis still strengthening against its peers.

That's posing a dilemma for the nation's policy makers as theyseek to arrest a plunge in exports and shore up an economy growingat its slowest pace since 1990. China's exchange rate climbed 0.6%against a trade-weighted basket last week, its biggest advance inthree months, even as it slumped 0.8% versus the greenback to asix-year low. Against the euro and the South Korean won, the yuangained at least 0.7%.

With the latest data showing Chinese outbound shipments sank 10%last month from a year earlier, the case for a weaker currency isgrowing. The quandary for policy makers is how to allow a quickerpace of depreciation against the dollar without sparking the sizeof capital outflows that occurred in January this year and August2015.

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