Top Biz News

Analysts: Yuan's rise no surprise

By Xin Zhiming (China Daily)
Updated: 2006-11-28 09:25

The value of the yuan has been rising gradually under the pressure of China's stockpile of foreign exchange reserves and huge trade surplus. The US dollar, on the other hand, has weakened "since many countries seem to be adjusting the US dollar-centred international reserve structure."

Yi Xianrong, researcher with the Institute of Finance and Banking of the Chinese Academy of Social Sciences, said: "The new high (in the yuan's central parity rate) is not surprising, it is still within the (band) limit of 0.3 per cent."

In the wake of last July's reform, the market's general expectation has been that the renminbi would appreciate to about 7.8 yuan per US dollar by the end of the year.

The Hong Kong dollar, which is pegged to the US currency, hit a new low against the yuan yesterday, with their value almost equal.

"Since the Hong Kong dollar is virtually pegged to the US dollar, its weakening against the renminbi is only a matter of course," said Yi.