Yuan Gains for Second Day

The yuan gained for a second day after the government's top planning agency said China will maintain a ``tight'' monetary policy to combat inflation.

The yuan is the best performer against the dollar this month of the 10 most-traded Asian currencies as the central bank allows it to strengthen to reduce import costs. There's no urgency to relax monetary policy even after the nation's deadliest earthquake in 58 years, officials from the National Development and Reform Commission said yesterday.

China's currency gained 0.09 percent to 6.9381 per dollar as of 5:30 p.m. in Shanghai, from 6.9444 yesterday, according to the China Foreign Exchange Trade System. The yuan has gained 0.69 percent this month. It touched 6.9350 today, the strongest since a peg to the dollar was abandoned in 2005.

China will reduce import tariffs on frozen pork and soybean meal to reduce food costs and ease inflation, the Ministry of Finance said yesterday. Inflation, mostly driven by food price increases, accelerated to 8.5 percent in April, from 8.3 percent in March. Food prices climbed 22 percent in the previous month from a year earlier.

Yuan Gains for Second Day

TradingEconomics.com, Bloomberg
5/29/2008 7:42:18 AM