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Saturday, China’s yuan had its first monthly loss against the U.S. dollar since May 2006, owing to speculation that a drop in global demand would prompt the government to restrict currency gains to protect exporters, Xinhua reported. Government bonds rose.

The yuan registered a 6.6% gain in the first half, which nearly matched the advance for entire 2007, crimping profits at exporters, while cooling sales abroad. Thursday, Chinese Vice Commerce Minister Gao Hucheng said slower growth globally would weigh on the country’s exports in the second half of 2008.

China’s top currency regulator the State Administration of Foreign Exchange said Friday on its Website that the country would begin yearly checks on how well domestic and foreign banks implement rules on foreign-currency controls.