Sept. 26 (Bloomberg) -- China's yuan slid by the most since a peg against the dollar was scrapped in July 2005 on speculation policy makers are limiting appreciation to aid exporters and sustain growth amid global financial turmoil.

Premier Wen Jiabao pledged on Sept. 24 to maintain economic, financial-market and capital-market stability as the U.S., the world's largest economy, may enter a recession. China halted yuan gains this quarter as a central bank survey published Sept. 22 showed export orders dropped to the lowest since the peg.

``Worries about the economy have escalated,'' said Yang Bin, a Beijing-based dealer at Bank of China Ltd., the country's biggest foreign currency trader. ``A return to the fast pace of appreciation in the first half would stifle struggling export industries at this difficult time.''

The Chinese currency fell 0.46 percent to 6.8485 per dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. The yuan, Asia's best-performing currency this year, has advanced 0.08 percent this quarter, the smallest gain since a fixed exchange rate ended more than three years ago.

China will adjust policy in a ``timely'' manner as the economic situation changes, Wen said at a forum in New York, according to a report yesterday by the state-run Xinhua News Agency.

Chinese industrial companies' profit grew 19 percent from a year earlier to 1.87 trillion yuan ($274 billion) in the first eight months of the year, the statistics bureau said today. That compares with 37 percent growth in the same period of 2007.

``Importers' demand for the dollar is quite strong today because the markets will be shut next week for the holiday,'' said Li Tao, a foreign exchange trader at Shenzhen Development Bank Co. in Shenzhen. Financial markets will be closed for the National Day holidays.

Government bonds declined 0.1 percent this week, paring gains from the previous 11 weeks, according to an Asian local- currency debt index compiled by HSBC Holdings Plc.

The yield on the 4.5 percent treasury bond due May 2038 was little changed at 4.2 percent, according to the China Interbank Bond Market. The price of the security was 105.05 per 100 yuan face amount.

To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net; Belinda Cao in Beijing at lcao4@bloomberg.net

Last Updated: September 26, 2008 06:00 EDT