RMB expected to hold strong amid soft dollar

An employee at a bank counter in Nantong, Jiangsu province, counts renminbi and dollars. [Photo/China Daily]

The central parity rate of the renminbi remained high on Wednesday, moving up to 6.72 against the greenback from 6.71 on Tuesday, after both onshore and offshore yuan reached a nine-month peak.

Analysts expect RMB to continue its momentum, though the rally may not be as strong as the first half year.

As of noon, the offshore yuan stood at 6.73 against the US dollar, with a 0.04 percent increase, while the onshore yuan rose 0.08 percent to 6.72 for each dollar.

Given the upcoming US Federal Reserve's meeting in September, Wang Yang, futures researcher with the Guotai Junan Securities, said the central bank is likely to begin reducing its balance sheet and release a timetable for another rate hike, which is looking to driving the dollar index rebound to some extent. He made the remark when talking to the China Securities Journal.

However, Wang added the depreciation anticipation of RMB has obviously quelled and was almost unlikely for the Chinese currency to slump significantly.

"I believe at the end of this year, the US dollar against the RMB could trade even below 6.7," Chi Lo, senior economist of BNP Paribas Asset Management, told Xinhua.

"By next year, the RMB may strengthen another two percent further."

Tan Xinyu contributed to this story.