Chinese Yuan Advances to Strongest Since End of Dollar

The yuan rose to the strongest since a peg to the dollar was scrapped in July 2005, after the central bank reiterated its pledge to maintain a ``tight'' monetary policy this year.

The currency made its biggest three-day gain since the end of the dollar link, after advancing 7 percent in 2007, double the pace of the previous year. The central bank will further control liquidity and improve the currency exchange mechanism in 2008 to ``adjust overall demand and improve the balance of international payments,'' Governor Zhou Xiaochuan said in a New Year's message on the bank's Web site on Dec. 29.

The yuan rose 0.15 percent to 7.2934 per dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. It touched 7.2930 per dollar, the strongest since the end of a dollar peg. The currency gained last year as the country's policy makers sought to curb inflation and reduce a record trade surplus.

Chinese Yuan Advances to Strongest Since End of Dollar, Bloomberg
1/2/2008 4:11:02 PM