Rising yuan increases risks

The yuan's daily reference rate set by the central bank rose to a historical high of 6.1911 per US dollar on Tuesday. Such a strong rising momentum, however, may pose risks as China's economic growth eases and capital inflows accelerate.

On Monday, the central bank also surprised the market by keeping the yuan's reference mid-point almost flat despite a rising dollar.

The yuan has risen by more than 1.5 percent against the dollar this year in terms of the mid-point rate and most of the gains have come since April. The yuan's recent trend is tricky since the dollar has been on the rise.