The People's Bank of China, the country's central bank, set the yuan's central parity rate at 6.8482 against the US dollar this morning, appreciating the Chinese currency to above the 6.85-level for the first time this week.
The yuan was floating at around the 6.85-level from the beginning of this month. The central parity rate was 6.8292 on Nov 27 and 6.8349 on Nov 28, the last two trading days before December.
This week, the yuan has been weak, with its market trading value once hitting 6.88 against the dollar, sparking speculation that China was shifting to a "weak yuan" exchange rate policy to shore up struggling exporters and save jobs.
As the global financial crisis that originated from the US keeps worsening and starts to bite into the real economy of many other countries, China's exports have shown signs of a significant slow-down due to sluggish overseas demands, pressuring the yuan to depreciate, analysts said.
Nonetheless, Chen Deming, China's commerce minister, said yesterday at the fifth China-US Strategic Economic Dialogue that China won't rely on a weaker yuan to boost exports. "The recent small fluctuation of the yuan against the dollar was completely normal", he said. "I'd call it 'dollar strengthening', rather than 'yuan depreciating'."
The central parity rate of the yuan first broke the 6.85-mark against the dollar on Jul 11 this year and hit 6.8009 on Sept 23, the highest since the country de-pegged the yuan from the dollar in July, 2005. Since then, the yuan has gained more than 20 percent against the dollar.
(China Daily December 5, 2008)
