A stronger currency, up more than 2 percent this year, may help quell price rises at an 11-year high as the nation's worst snowstorms in five decades have pushed costs up. Faster gains in the yuan, also known as the renminbi, may lower the prices of imported goods as oil and other commodities rallied to records.
The yuan rose 0.13 percent to 7.1490 per dollar as of 10:21 a.m. in Shanghai, compared with 7.1580 yesterday, according to China Foreign Exchange Trade System. China's currency rose about 7 percent in 2007.
The National Development and Reform Commission raised its inflation target to 4.8 percent for this year, up from 4.6 percent, the 21st Century Business Herald reported today, citing Zhou Wangjun, deputy director of the agency's price department.
Chinese Premier Wen Jiabao said a stable dollar is good for the U.S. and the rest of the world, Xinhua news agency reported yesterday, as the U.S. currency slumped to a record low against the euro. A weaker dollar may make it harder for China's central bank to control gains in the yuan.
Yi Gang, vice governor of the central bank, said over the weekend policy makers will select an ``optimal'' mix of currency, interest rate and money-supply steps to tackle inflation, ``the biggest risk'' to the economy.