China's yuan appreciation vs US dollar quickening

13:40, April 22, 2011      

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China's yuan hit a new record high Friday as the central bank set the mid-point at an all-time high of 6.5156 to one U.S. dollar.

Analysts believe that the central bank is using the yuan's exchange rate to help fight imported inflation. Consumer price index jumped to 5.4 percent in April, hitting a 32-month high.

The dollar/yuan exchange rate can trade up or down 0.5 percent from the mid-point each working day in line with the central bank's regulations.

On the yuan spot trading market, the Chinese currency was trading at a record high of 6.5130 versus the dollar Friday morning, up from Thursday's close of 6.5205. The yuan has now risen more than 4.8 percent since it was depegged from the dollar in June 2010, and increased 1.5 percent in value this year.

The PBOC has set a slew of record high fixings this year to express the government's intentions for the yuan to appreciate against the U.S. dollar.

Meanwhile, yuan forwards traded at the biggest premium to the spot rate in more than five months, reflecting speculation the central bank will allow faster currency gains to help tame inflation.

Twelve-month non-deliverable forwards rose 0.3 percent to 6.3285 per dollar in Hong Kong.

By People's Daily Online
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