By Bloomberg News Dec. 17 (Bloomberg) -- China’s yuan forwards fell to a seven-week low on speculation policy makers will keep the currency from advancing to help counter a slump in exports. Twelve-month non-deliverable forwards declined for a third day after the commerce ministry said yesterday shipments will take “considerable time” to recover to levels recorded before the global financial crisis and the nation’s trade surplus may shrink next year. The dollar, which the yuan has been tied to since July 2008, climbed against all of the world’s 16 most-used currencies on signs a U.S. economic recovery is gathering pace. “Exports are the key factor in China’s foreign-exchange policy,” said Liu Xin, an analyst at the Hong Kong branch of Bank of Communications Ltd., China’s fifth-biggest lender. “Appreciation next year will probably be only around 2 percent.” Twelve-month forwards slipped 0.07 percent to 6.6972 per dollar as of 10:47 a.m. in Hong Kong, after touching 6.7025, the weakest since Oct. 27, according to data compiled by Bloomberg. The contracts show traders are betting on a 2 percent gain from the spot rate of 6.8286, according to China Foreign Exchange Trade System. Overseas sales dropped 1.2 percent in November from a year earlier, a 13th monthly decline, the government reported last week. The trade surplus narrowed to $19.1 billion, from $24 billion in October. Dollar Peg China has effectively pegged the yuan at about 6.83 per dollar since July last year to aid exporters and has rebuffed calls from the U.S. and Europe to allow the currency to strengthen. The dollar declined against all of the world’s 16 most- actively-traded currencies this year, according to data compiled by Bloomberg. It strengthened today after the Federal Reserve said the U.S. economy is strengthening and most of its special liquidity facilities will expire on Feb. 1. Forwards are agreements to buy and sell assets at current prices for delivery at a future specified time and date. Non- deliverable contracts are settled in dollars. --Judy Chen. Editors: James Regan, Simon Harvey To contact Bloomberg News staff for this story: Judy Chen in Shanghai at +86-21-6104-7047 or Xchen45@bloomberg.net.

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