Yuan Reaches 17-Year High on Inflation Concern, Record Fixing
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The yuan reached a 17-year high before the sixth anniversary of a dollar peg being scrapped, fanning speculation currency gains will be allowed to help tame inflation.
The People’s Bank of China set its daily fixing 0.14 percent higher at 6.4592 per dollar, the strongest level since July 21, 2005, the day China ended a fixed exchange rate and said the yuan would be allowed to fluctuate against a basket of currencies. Inflation will remain a significant issue in the long term while China’s economy is restructuring, even if global and domestic monetary factors weaken, the People’s Daily reported today, citing central bank adviser Xia Bin. Consumer prices climbed 6.4 percent in June, the most in three years.