Yuan hits 20-year high versus US dollar
Print Edition
The yuan strengthened to a 20-year high against the US dollar yesterday after the central bank set a record reference rate that signals support for further appreciation of the Chinese currency.
The yuan touched 6.067 per US dollar on the spot market yesterday morning, its highest level since China unified official and market rates at the end of 1993. The yuan had reached 6.0702 on Monday.
The yuan closed at 6.086 yesterday, 0.1 percent stronger than on Thursday.
The rise came after the People’s Bank of China boosted the central parity rate 0.17 percent to 6.1050 per US dollar, the strongest since the yuan’s peg to the greenback was lifted in July 2005. The yuan is allowed to be traded within 1 percent on either side of the parity rate.
The central bank has raised the parity rate by 3 percent this year. That compared with a nearly flat performance last year.
A Deutsche Bank report said the yuan may continue to rise in 2014 driven by corporate money flows as global growth gradually recovers and China’s exports pick up.
Central bank data showed financial institutions bought a net 397.9 billion yuan (US$65.6 billion) worth of foreign exchange in November. It was the third-highest total this year and indicated an abundant inflow of foreign capital.
Traders said the central bank seemingly withdrew efforts to tame appreciation, but transactions have dropped as the year-end approaches, distorting the market rate to some extent.
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