Yuan breaks 7.18 mark against US dollar

Updated: 2008-02-15 11:28

BEIJING -- China's currency, the yuan, climbed 127 basis points to a central parity of 7.1763 yuan to US$1 on Friday, breaking the 7.18 mark for the first time.

It was the 14th new high against the dollar this year.

The yuan, also known as the Renminbi, set a new record four trading days in a row in mid-January. On January 31, it broke the 7.19 mark to a central parity of 7.1853 yuan to one dollar, following a bold half-percentage point rate cut by US Federal Reserve.

On Thursday, Ben Bernanke, chairman of the US Federal Reserve, pledged to tackle the credit crunch that was threatening America's growth by acting "as needed" to bolster its flagging economy.

Market observers believed Bernanke's words signaled new interest rate cut, which helped pushing the US currency further down.

The Chinese currency has appreciated against the dollar by about 12 percent since a new currency regime was imposed in July 2005 to unpeg it from the dollar.

It climbed 6.9 percent against the dollar last year.

Observers forecast the yuan would appreciate by 7 to 10 percent against the U.S. dollar this year.

On Thursday, the yuan lost 346 basis points against the European currency to 10.5063 yuan to one euro.

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