The Chinese Yuan rose to a fresh record high against the U.S. dollar on Friday after the People's Bank of China fixed the currency's mid-point at a record high for the third day in a row.
The Chinese central bank sets the central parity rate every morning and allows the currency to fluctuate up to 0.5 percent from that level. The range was last widened to 0.5 percent from 0.3 percent in May 2007. On Thursday the Yuan climbed to 6.4536 per dollar, compared to Wednesday's close of 6.460. The Yuan rose 0.12 percent to close at 6.4516 per dollar in Shanghai, the biggest advance in a week, according to the China Foreign Exchange Trade System. The currency reached 6.4505 earlier, the strongest level since China unified official and market exchange rates at the end of 1993. In Hong Kong’s offshore market, the Yuan appreciated 0.02 percent to 6.4545. China''s State Administration of Foreign Exchange has said on its website that the Yuan''s appreciation will not lead to the country''s record currency reserves declining and foreign-exchange regime reform should accelerate. The International Monetary Fund said China should let the Yuan gain to boost demand and global economic stability, citing the risk that any growth shocks in the country will hurt the world, the fund said in a statement released late yesterday in Washington. The currency remains undervalued by 3 percent to 23 percent, depending on methodology, and fell against the currencies of trading partners in the past year in inflation- adjusted terms, the organization’s economists said.