Chinese yuan strengthens to 6.6601 against US dollar Monday

The central parity rate of the Chinese currency, the renminbi or the yuan, strengthened 41 basis points to 6.6601 against the US dollar Monday, according to the China Foreign Exchange Trade System.

The dollar was weighed down by weak US inflation data which dampened prospects of another Federal Reserve interest rate hike later this year.

Friday's data showed the US consumer price index edged up just 0.1 percent last month after it was unchanged in June.

Meanwhile, China's economy continued its steady expansion in the first half of this year with GDP up 6.9 percent, supporting the Chinese currency.

"The renminbi, despite moving closer to the level consistent with overall assessment, remained broadly in line with fundamentals and desirable policies," said the IMF in its latest External Sector Report released last month.

China's policies put in place to stabilize growth have led to recent appreciation of the RMB and helped ease capital outflows and foreign exchange reserve loss, according to the IMF.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.