RMB at record high of 6.2670 against dollar

The exchange rate for the renminbi reached a new high against the US dollar on Wednesday, hitting 6.2670, according to the central parity rate for the yuan set by the People's Bank of China.

The rate, the highest recorded since the country adopted exchange rate reforms in 2005, exceeded the previous record high of 6.2787 set on Friday.

The central bank announced on April 14 that it would expand the yuan's daily trading band, allowing it to fluctuate by 1 percent above or below the parity rate. Before, it could move by 0.5 percent in either direction.

The change was designed to increase the currency's flexibility against the dollar.

The central parity rate of the yuan against the US dollar derives from a weighted average of prices seen before the opening of the market each business day.

Friday was the first trading day that the yuan had fluctuated against the greenback at a rate exceeding the previous limit of 0.5 percent. Its spot rate on the noon market was down to 6.3103, 0.503 percent away from the parity rate.

"China is ready to let the market play a bigger role in foreign exchange rates," Yi Gang, director of the State Administration of Foreign Exchange, said in a recent forum in Beijing

Despite the record highs, the yuan has been appreciating more slowly since the beginning of the year.

Zhu Baoliang, a researcher with the State Information Center, predicted the yuan will appreciate by about 2 percent this year. Last year, it had gone up by 4.5 percent.

"The renminbi's exchange rate is nearing ‘equilibrium', and the currency will be more likely to show two-way fluctuation instead of the appreciation in one direction seen in previous years," Jin Zhongxia, a central bank researcher, wrote in a recent article.