Nov. 18 (Bloomberg) -- The yuan fell as policy makers focus on supporting exporters amid signs the world's fourth-largest economy is slowing because of global financial turmoil.

Premier Wen Jiabao said last week the effect of the international crisis on China ``is worse than expected,'' as the government unveiled a $586 billion stimulus package. Half of China's toy exporters closed this year and 67,000 smaller firms filed for bankruptcy in the first half, government figures showed.

``We expect the dollar to move higher versus the yuan as the focus shifts decisively to growth,'' said Thomas Harr, a senior foreign exchange strategist with Standard Chartered Plc in Singapore. ``But not a massive move though, probably up to close to 7 in the first half'' of next year, he said.

The currency traded at 6.8270 per dollar in Shanghai as of 9:45 a.m., compared with 6.8269 yesterday, according to the China Foreign Exchange Trade System. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the so-called central parity rate, which was set at 6.8280 today.

China has limited yuan gains to 0.4 percent since the end of June after a 6.6 percent advance in the first half, Asia's best performance. Policy makers have held off from weakening the yuan to avoid an exodus of funds.

``I don't think the government will let the yuan depreciate in the short term as a weaker yuan, in combination with the central bank's rate cuts, would trigger capital flight,'' said Liu Xin, a Hong Kong-based currency analyst with Bank of Communications Ltd. ``If global demand is weakening, even a weaker yuan won't help much to boost China's exports.''

The State Administration of Foreign Exchange, China's currency regulator, said on Oct. 29 that China needs to prepare for any potential net outflows of capital and form a mechanism to manage crises.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net. Belinda Cao in Beijing at lcao4@bloomberg.net.

Last Updated: November 17, 2008 21:10 EST