Expats Living in Shanghai
Home >Expats Living in ShanghaiThe yuan hit a 17 year high.
Update：2013-12-10 00:56 Views：
THE yuan rose to a new 17-year high yesterday as the market expects the currency to appreciate faster especially as the Chinese government is determined to rein in inflation as exemplified by a new interest rate increase.The yuan ended at 6.5440 against the greenback yesterday in Shanghai, according to the China Foreign Exchange Trade System. It was the strongest level since China unified the official and market exchange rates at the end of 1993.
The People's Bank of China set the yuan's reference rate 0.05 percent higher at 6.5496 yesterday.
"Rising inflationary expectations require renewed monetary tightening efforts," said Liu Ligang, an ANZ economist. "Given the rising price pressures originating from imported inflation, the yuan exchange rate will need to appreciate at a faster pace."
Liu said the yuan may appreciate by 6 percent this year.
JPMorgan research team echoed the view that the authorities will let the yuan appreciate faster in the first half of this year as part of a strategy to curb inflation.
The benchmark one-year loan rate rose to 6.31 percent from yesterday, up 0.25 percentage point. The one-year deposit rate went up by the same level to 3.25 percent.
This was the fourth rate hike since October.
The latest rate rise suggests the March inflation figure could be higher than market expectations, and shows the PBOC is determined to keep a tightening stance to manage inflationary pressure.
The PBOC is using a multi-pronged approach to curb inflation, including raising bank reserve requirement ratio nine times since 2010.
Search
Area
Classified Information