Dlr/yuan NDFs fall after depeg, trim loss on mid-point

* Flat mid-point disappoints, but PBOC can still push yuan up

* Traders watching state-owned banks for spot yuan direction

* 1-yr USD/CNY NDFs slide to 6.6300, imply 3 pct appreciation

* Spot at 6.8267 vs mid-point of 6.8275

By Lu Jianxin and Koh Gui Qing

SHANGHAI, June 21 (Reuters) - Dollar/yuan offshore forwards plunged across the curve on Monday morning to imply more yuan appreciation but later trimmed that loss after China's central bank kept its daily yuan mid-point flat, disappointing players expecting an immediate rise.

The market had expected the People's Bank of China to allow the yuan's mid-point to rise 5 to 10 pips after Beijing ditched the yuan's 23-month peg to the dollar and said it would allow the currency to trade more flexibly, paving the way for appreciation. [ID:nN20208975]

The stable mid-point indicated that the PBOC wanted to dampen speculation on imminent yuan appreciation after its surprise announcement on Saturday, and traders suspected the central bank might adopt a new strategy to let the yuan be more market-determined.

The central bank could use major Chinese state-owned banks trading on its behalf in the spot market to guide the yuan up or down, regardless of the mid-point, dealers said.

The yuan is allowed to trade 0.5 percent up or down versus the dollar relative to the mid-point but rarely moves much within that tight trading band.

"It appears the central bank will adopt a new strategy, using the market to guide the yuan up or down," said a senior dealer at a Chinese state-owned bank in Beijing.

"That will look more market-oriented," he said. "The mid-point will remain a choice but it will be used for a stronger central bank signal for where it hopes the yuan will go."

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Yuan special coverage: china.thomsonreuters.com/yuan/

Yuan Debate Top News page: link.reuters.com/jej52k

For full coverage [ID:nSGE65I02M]

Breakingviews [ID:nLDE65I0D5]

Factbox on China's currency system [ID:nSGE65I02Q]

G10, emerging FX scenarios [ID:nSGE65J005]

Analysis [ID:nTOE65J00K]

Graphic: yuan moves since 2005 r.reuters.com/sut87k

Insider TV:

-- New tone, same old yuan link.reuters.com/cad92m

-- Deferring rate rise link.reuters.com/wyc92m

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Spot yuan CNY=CFXS edged higher to 6.8254 against the dollar after the PBOC set Monday's mid-point unchanged at 6.8275 before trading started.

Near-term three-month dollar-yuan non-deliverable forwards CNY3MNDFOR= were quoted at their lowest since July 2008 in early trade, at 6.7200 against Friday's close of 6.7810, implying yuan appreciation of 1.6 percent over the next three months, up from Friday's implied appreciation of 0.7 percent.

They rose back to 6.7530 late in the morning after the central bank's mid-point, implying a yuan rise of 1.1 percent. ($1=6.82 yuan) (Editing by Edmund Klamann)