Yuan Rises to Highest Since Peg


The yuan climbed for a second day to the highest since the end of its link to the dollar was scrapped in 2005 as record oil prices spurred speculation China will allow faster currency gains to curb inflation.

The yuan, up more than 10 percent in the last year making it Asia's fourth-best performer, also rose as the U.S. currency traded near a record low versus the euro. China is seeking to slow consumer prices from near an 11-year high. Premier Wen Jiabao said last week that the country will strike a balance between maintaining economic growth and cooling inflation.

The yuan advanced 0.10 percent to 6.9827 per dollar as of 5:30 p.m. in Shanghai, from 6.9897 late yesterday, according to the China Foreign Exchange Trade System. It earlier strengthened to as high as 6.9824.

The People's Bank of China set the reference rate for yuan trading at 6.9837 today, the highest since the end of the dollar peg. The currency is allowed to trade by up to 0.5 percent against the dollar either side of the rate.


TradingEconomics.com, Bloomberg
4/23/2008 7:25:15 PM