China's yuan climbs to another record high against USD

http://www.chinaccm.com 2007-7-25 13:59

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

    The central parity rate of the yuan, also known as Renminbi (RMB), 
stood at 7.5596 yuan to the U.S. dollar, up 129 basis points from 
Tuesday's 7.5725 yuan to one dollar. 

    It is the 54th time that the yuan's value hit a record this year, 
and also the highest rate since the yuan was revalued by 2.1 percent 
from 8.28 yuan in July 2005. 

    The yuan has climbed 2,491 basis points from 7.8087 on the last 
trading day of 2006, and the value of the yuan has increased by 7.28 
percent since the country discontinued the yuan's peg to the dollar. 

    Analysts said the quicker pace of yuan's appreciation was closely 
related to the central bank's announcement to raise the benchmark 
interest rates last Friday. 

    The yuan is also under pressure of further appreciation with U.S. 
Treasury Secretary Paulson's visit to China at the end of this week, 
as the flexibility of the yuan will be the focus of the discussion
 between the two sides. 

    The yuan's value has been fluctuating within a small range after 
it breached the 7.57 mark on July 16. It lost 83 basis points on 
Tuesday.
 

    Tan Yaling, a research analyst with the Bank of China earlier 
warned the continued yuan revaluation in a single direction may 
adversely affect the country's economic and financial security. 

    Some economists are worried that persistent anticipation of yuan's
 
appreciation would attract more speculative fund into the country and 
worsen the excessive liquidity problem faced by the Chinese government.
 

    On Wednesday, the central parity rate of RMB against the euro went 
up 352 basis points from Tuesday's figure to stand at 10.4368, while 
yuan's value against the Japanese yen gained 240 basis points to 
6.3031 yuan against 100 yen.