Yuan benchmark exchange rate hits new high
(Xinhua)
Updated: 2006-07-28 11:39
China's currency, the yuan's daily benchmark, or central parity, rose to a
new high of 7.9792 against the U.S. dollar, the China Foreign Exchange Trading
System announced Friday.
Generally, the yuan has been inching upward since the government raised the
value by 2 percent and started linking it to a basket of foreign currencies in
July last year, scrapping its decade-old peg to the U.S. dollar.
The yuan, limited to moving 0.3 percent above or below each day's parity rate
against the U.S. dollar, has now risen 1.1 percent since the beginning of this
year.
The central parity is based on a weighted average of prices from all market
dealers, including major domestic banks, before the market opens each business
day.
Analysts attribute yuan's appreciation to the recent weak performance of the
U.S. dollar on the international market. The expectation that the United States
may stop raising interest rates has led to dollar's drop.
The United States has been pressuring China for further appreciation due to
its huge trade deficit with China. U.S. manufacturers contend that the yuan is
undervalued, making U.S. goods more expensive in China and Chinese products
cheaper in the United States.
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