(Yicai Global) Nov. 26 -- Chinese exporters are trying to protect themselves from the inexorable rise of the Chinese yuan against the US dollar by locking in exchange rates early through a form of futures contract with banks.

The yuan reached 6.5724 to the US dollar today, a gain of over 8 percent from a low of 7.1765 six months ago. The soaring exchange rate has swallowed up the profits of low-margin exporters and in many cases led to huge losses.

USD500 million was locked in by exporters this week, an employee at a joint-stock bank told Yicai Global. One client, which exports garden machinery to Europe, has locked in half of its dollar income for next year, he added. It has left the other half in the case of depreciation although this looks unlikely.

Analysts say the redback could reach 6.3 to the dollar by the end of the year. Next year, the yuan will fluctuate between 6 and 6.8 to the dollar, said Iris Pang, chief economist for China at Dutch bank ING.

If that happens, then an income of USD1 million will only be worth CNY6.3 million next year. But it is worth CNY6.6 million now, a foreign exchange strategist at a foreign-funded bank told Yicai Global.

Forward exchange settlements are priced at between 6.6074 and 6.7663 at the moment.

Editors: Tang Shihua, Kim Taylor