China’s yuan hits record high against US dollar

| March 22, 2011 | 0 Comments

The yuan has risen to an all-time high against the US dollar today - trading in a range from 6.5552 (a record high) to 6.5596 and up from Monday’s close of 6.5611.

The currency has now risen about 4.1% since last summer and 0.2% this week alone.

Beijing has been under pressure to let its currency appreciate more quickly to fight off inflationary pressures from rising oil prices.

Oil prices are hovering near two-year highs due to concerns about the ongoing civil unrest in Libya and the Middle East.

Last week, Chinese Premier Wen Jiabao said his Government can control stubbornly high inflation and rejected any changes to its tightly managed currency.

Many analysts have suggested that by allowing the yuan to strengthen against the US dollar, imports will become cheaper, therefore reducing costs.

Tensions between the US and China are ongoing after the US has previously expressed dissatisfaction that China is keeping the value of the yuan low to help its exporters at the expense of overseas competitors.

However, Beijing has previously warned that a sudden appreciation in the value of yuan may be harmful to the Chinese economy and keeping the currency stable is “an important contribution” to global recovery.

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