BIZCHINA / RMB Revaluation |
Yuan hits record high against US dollar(Xinhua)Updated: 2007-06-15 12:01 The yuan hit a record high against the U.S. dollar on Thursday for the second consecutive day. The central parity rate of the yuan, also known as renminbi (RMB), stood at 7.6258 yuan to one U.S. dollar on Thursday, up 0.69 percent from Monday's rate of 7.6785 to the dollar. The yuan has climbed 1,829 basis points from 7.8087 yuan to one U.S. dollar since the beginning of the year and the accumulative appreciation since July 21, 2005, when China abolished the yuan's peg to the dollar, has now exceeded 7.5 percent. The yuan has risen against a basket of currencies since Monday. The yuan has gained 1,024 basis points to reach a rate of 10.1469 yuan against the euro. lt also moved up 990 basis points to reach 6.2137 yuan against 100 Japanese yen. The appreciation of the yuan is largely due to the weakness of the U.S. dollar and depreciation of the Japanese yen, according to experts. Wan Xiaoxi, senior researcher with China Southern Fund, - a Shenzhen-based securities firm - said the recent depreciation of the yen and Japan's low interest rates had exacerbated imbalances in international payments and encouraged yen-carry trade. The carry trade involves taking advantage of Japan's low interest rates by borrowing the Japanese yen and investing the funds overseas for higher returns. The return of the funds to Japan would raise the value of the yen. Wan warned that if the yen continued to depreciate and China lifted its controls on foreign exchange, carry trade between the yen and the RMB could explode and China's forex reserves might bulge to three trillion dollars within two to three years. (For more biz stories, please visit Industry Updates) |