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Yuan hits new high against US dollar on June 5

(Xinhua)
Updated: 2007-06-15 14:10

China's currency, the yuan, hit a new high last Tuesday against the U.S. dollar, according to the Chinese Foreign Exchange Trading System.

The central parity rate of the yuan, also known as Renminbi (RMB), stood at 7.6427 yuan to one U.S. dollar on Tuesday, gaining 95 basis points from Monday's reference rate of 7.6525 to the dollar.

It is the second time the yuan's value exceed 7.65. On May 30, it challenged the 7.65 mark to reach 7.6488. The Chinese currency has climbed 1,660 basis points from 7.8087 yuan to one U.S. dollar posted on the last trading day of 2006.

The accumulative appreciation since July 21, 2005, when China discontinued yuan's peg to the greenback, has exceeded 7.5 percent.

The People's Bank of China, or the central bank, announced on May 18 that it would widen the floating band of yuan against U.S. dollar for daily spot trading on the interbank market from 0.3 percent to 0.5 percent as of May 21.

It is believed that as a fast growing economy with low inflation, China will inevitably see its currency rise in value. A gradual appreciation brings about fewer risks and upheavals than does an abrupt one.

On Tuesday, the yuan lost 274 basis points from the previous trading day to reach a central parity rate of 10.3165 yuan against one euro. And it moved down 68 basis points to reach 6.2781 yuan against 100 Japanese yen.