Stronger renminbi

The breaching of the 7-yuan mark to the US dollar is of symbolic importance, but not surprising. Policymakers still need to watch very carefully the impact of the strengthening of the Chinese currency on economic growth.

After a short pause early this week, the exchange rate of the yuan against the greenback yesterday continued its rise to surpass the 7:1 benchmark for the first time since China phased out its old exchange regime in July 2005. The yuan has gained about 18 percent in value since then.

This is an important moment because it has not only confirmed the recently quickened revaluation of the renminbi but also underscored the authorities' determination to fight soaring inflation with every measure possible.