New central bank policy reaps benefits

China's renminbi further strengthened against the US dollar on Monday, after the introduction of the central bank's new policy to prevent irrational sell-offs in the foreign exchange market. The currency's depreciation pressure is expected to ease in the near term, said analysts.

The renminbi's daily trading reference rate rose to 6.8508 per dollar on Monday, up from 6.8710 on Friday. The currency was allowed to trade up or down by 2 percent around the reference rate, or the central parity.

This rebound followed an announcement on the central bank's website late on Friday. It said that the country had resumed a "counter-cyclical factor" in the foreign exchange regime since August, to hedge against market's irrational sentiment toward a weaker yuan.