A clerk at an foreign currency exchange desk at a hotel shows
Chinese yuan banknotes in Shanghai, China, in this July 22, 2005 file
Beijing -- China's yuan
rose to a new high against the US dollar on Thursday to its highest level
since Beijing revalued the currency 16 months ago.
The yuan's appreciation, while still gradual, has been accelerating recently.
Almost every week, it hits new highs against the dollar. Thursday's
rate of 7.8697 to dollar broke the high set Wednesday, when the yuan closed at
7.8661 on China's currency markets.
Since Beijing cut its direct
link to the US currency on July 21, 2005, the yuan has gained about 3 percent.
But the United States and other trading partners are still pushing for a
faster rise, saying a weak yuan is contributing to China's bulging trade surplus
by making Chinese exports cheaper and more competitive.
central bank allows the dollar-yuan rate to move no more than 0.3 percent in
Market observers attribute the appreciation to the
continuous slump of the US dollar, saying expectations for an interest rate drop
in the United States pressed the yuan's value up.
Last month, the US Federal Reserve decided to keep the interest rate
unchanged at 5.25 percent for the third time in a row since August.
Meanwhile, the anticipation that China's foreign exchange reserves will
exceed US$1 trillion this month is considered another factor in the yuan's
appreciation. A China Central Television report said the reserves had already
surpassed the trillion dollar mark.
China's foreign exchange reserves had reached US$987.9 billion by the end of
September, with a monthly average increase of US$18.7 billion for the first nine
The RMB was under heavy pressure to appreciate, but the currentfloating band
of its exchange rate was wide enough, said Tang Xu, director general of the
research department of China's central bank, at a recent