Chinese Yuan Parity Rate Hits Fresh Record High Against Dollar
Friday, the People’s Bank of China set the central parity rate for the yuan at a fresh record high of 6.3972 against the U.S. dollar, compared to Thursday’s daily reference rate of 6.3991.
The Chinese central bank sets the central parity rate every morning and allows the currency to strengthen or weaken 0.5 percent from that level.
However, the yuan changed little against the dollar in Asian forex market today. The yuan rose to as much as 6.3918 per dollar in early deals, but pulled back steadily thereafter and touched a low of 6.3994 at 9:55 pm ET. The pair has reversed direction then and is now worth 6.3968, compared to yesterday’s close of 6.3985.
The yuan broke the 6.40 level against the dollar yesterday and hit a fresh record high of 6.3913. The yuan’s dramatic rise to record highs in recent weeks reinforced expectations that the country’s central bank is allowing yuan to strengthen in an effort to curtail inflation.
Data released early this week from the National Bureau of Statistics showed that the rate of inflation in China rose to 6.5 percent in July from 6.4 percent in June. Economists expected the rate to remain unchanged at the June level. Month-on-month, the consumer price index advanced 0.5 percent.
The continued jump in consumer prices is mounting pressure on the central bank to raise rates, limiting room for monetary easing in the face of heightened global uncertainty and slowing domestic economic growth.
