SHANGHAI, March 11 (Reuters) - The Chinese yuan firmed on Thursday as the greenback softened after benign U.S. inflation data and as China"s central bank guided the local currency higher. The People"s Bank of China (PBOC) set the midpoint rate at 6.497 per dollar prior to market open, 136 pips firmer than the previous fix of 6.5106. In the spot market, the yuan opened at 6.4950 per dollar and was changing hands at 6.4986 around midday, 77 pips firmer than the previous late session close. The offshore yuan was trading at 6.502 per dollar. The dollar nursed losses against most currencies on Thursday after benign data on U.S. consumer prices and a decline in Treasury yields led some investors to trim bets on a rapid acceleration in inflation. Traders said the dollar weakness provided support for the yuan. "The yuan would remain range-bound around the current levels," said a trader at a Chinese bank. But some analysts said China"s yuan could face downward pressure as other economies bounce back from the fallout of the COVID-19 pandemic. "The yuan correction could last for at least two quarters, as the economic recovery of other countries would also pick up as vaccines become more available," said Wang Jianhui, chief economist at Capital Securities. "The level that truly reflects the yuan"s fundamentals would be between 6.5 per dollar and 6.8 per dollar," Wang added. Meanwhile, data showed new bank lending in China fell in February from January as the central bank seeks to cool credit growth, but by less than expected. "The improvement of credit structure pointed to the robust financial stability, and we reckon that the PBOC is in no rush to tighten its monetary policy stance for now," Ken Cheung, strategist at Mizuho Bank Ltd, said in a note. Eyes were also on the development of Sino-U.S. relations. U.S. Secretary of State Antony Blinken will meet with top Chinese officials on March 18 in Alaska, the White House said on Wednesday, the first high-level in-person contact between the two sparring countries under the Biden administration. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 96.86, weaker than the previous day"s 96.98. The global dollar index fell to 91.784 from the previous close of 91.814. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan"s value, traded at 6.6771, 2.70% away from the midpoint. One-year NDFs are settled against the midpoint, not the spot rate. The yuan market at 3:41AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.497 6.5106 0.21% Spot yuan 6.4986 6.5063 0.12% Divergence from 0.02% midpoint* Spot change YTD 0.46% Spot change since 2005 27.36% revaluation Key indexes: Item Current Previous Change Thomson 96.86 96.98 -0.1 Reuters/HKEX CNH index Dollar index 91.784 91.814 0.0 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People"s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.502 -0.05% * Offshore 6.6771 -2.70% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Luoyan Liu, Jindong Zhang and Andrew Galbraith; Editing by Ana Nicolaci da Costa)