THE yuan fell the most this year, paring its gain to 4.1 percent on speculation the central bank will slow the pace of appreciation to bolster demand for exports.

　　Contracts that allow traders to bet on the yuan's value in 12 months weakened by the most since 1999.

　　People's Bank of China Governor Zhou Xiaochuan said this week that weaker demand for goods sent overseas contributed to slower yuan gains.

　　"Expectation of the yuan appreciation has weakened significantly," said Huang Yiping, chief Asia economist at Citigroup Inc in Hong Kong. "Investors believe that the weakening United States economy may cause an economic slowdown in China, including the export sector."

　　The currency fell 0.26 percent to 7.0052 in Shanghai as of 5:30pm, compared with 6.9871 yesterday, according to the China Foreign Exchange Trade System. The yuan's offshore non-deliverable forwards fell 1.24 percent to 6.6005, the weakest since February and the biggest daily loss since August 5, 1999.