(Yicai Global) Sept. 7 -- Despite the yuan's recent rally against the dollar, chief economists at major Chinese financial institutions believe the value of the greenback will rise back to the 6.60 level recorded at the end of August.

On average, the chief economists interviewed by Yicai Global forecast the central parity rate between the two currencies to be 6.63 at the end of this month, compared with 6.601 on Aug. 31. They believe China's foreign exchange reserves increased from USD3.081 trillion in late July to USD3.094 trillion at the end of last month, suggesting the reserves have continued their rise that began in February.

Wang Tao, at UBS Securities, was the most optimistic, believing foreign reserves may have risen by between USD25 billion and USD30 billion last month, factoring in the slowdown in China's capital outflow, significant appreciation of the euro, yen, pound and other major currencies against the dollar, a moderate increase in China's trade surplus and flattening net foreign direct investment.

All of the chief economists interviewed believe benchmark deposit and lending rates and the required reserve ratio will remain unchanged this month.

As an indicator of the overall economic trend, the Yicai Chief Economist Confidence Index is currently 51.02, up slightly from a month earlier. It has remained above the 50 threshold for 13 straight months.

Only one of the 17 economists surveyed rated the national economic performance below 50, with the rest seeing a stable economy rising slightly in the month to come.

Given real estate market regulation and the government's deleveraging drive, tight monetary policy and government supervision have restrained investment and production activities to a certain extent, said Bank of China's Chen Weidong. This, coupled with rising production costs and rigorous environmental measures, will see the business climate slack off somewhat over a certain period of time.

The economists forecast consumer price index growth last month to be 1.61 percent -- the official result will be released next week -- up from the 1.4 percent recorded by the National Bureau of Statistics for July. They forecast the producer price index growth in August to rise to 5.64 percent from 5.5 percent a month earlier.

The average forecast for fixed asset investment growth in August was 8.2 percent, down from the NBS's 8.3 percent in July. That of real estate investment growth was 7.49 percent, down 0.41 percentage point from July's 7.9 percent.

Both new loans and social financing increased last month, the economists believe. They expect new loans to have grown from CNY825.5 billion (USD127 billion) to CNY935.6 billion, and social financing to CNY1.32 trillion from CNY1.22 trillion, the central bank's figure for July.

The economists predict the growth of broad measure of money supply, known as M2, to continue the decline it began in February, slipping from 9.2 percent to 9.08 percent.

M2 growth has hit new lows, suggesting China's financial deleveraging measures have been effective, said Xu Sitao from the Economist magazine. The banking boom continued to cool off, and asset quality has gradually improved. In future, policymakers will focus on preventing financial risks and driving economic growth.