China's currency, the yuan, climbed 77 basis points to a central
parity of 7.1846 yuan to one U.S. dollar on Tuesday, setting a new
high on the 10th occasion since the beginning of this year.
The local currency had refreshed record for four trading days in
a row in mid January. Last Thursday 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 the U.S. Federal Reserve.
Analysts attributed the continuous rise to a weakening U.S.
dollar. They said the declined rate for U.S. retail sales in
December was much higher than expected, which was ascribable to the
lackluster of the country's real estate market and price hikes for
oil.
The release of the figure helped push the U.S. dollar further
down, which had ebbed continuously for a while. The downturn of the
U.S. dollar would continue throughout the first half of 2008, while
Asian currencies were expected to remain strong.
They forecast that the Chinese currency would appreciate at
least 7-10 percent against the U.S. dollar for the whole year.
The Chinese currency had appreciated against the greenback by
about 12 percent since a new currency regime was imposed in July
2005 to revalue and de-peg it from the dollar.
It had climbed 6.9 percent against the dollar in the past year,
but some U.S. critics say it remains undervalued, giving Chinese
exporters an unfair advantage and resulting in the massive trade
imbalance between the two countries.
China was not against revaluation of the yuan, but opposed
"excessively rapid" appreciation that was inappropriate to its
national conditions, Commerce Minister Chen Deming said last
month.
Premier Wen Jiabao also said China would improve the yuan's
exchange rate mechanism in a controllable and gradual manner, let
the market play a bigger role in the mechanism and enhance the
currency's flexibility.
On Tuesday, the last trading day on the Chinese lunar calendar,
the yuan lost 11 basis points against the unified European currency
to 10.6497 yuan to one euro. It gained 41 basis points against the
Japanese currency to 6.7309 yuan to 100 Japanese yen while lost 365
basis points to reach 14.1820 yuan to one British pound.
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(Xinhua News Agency February 5, 2008)
