China's currency reaches new high against dollar

Oct 11, 2010, 7:34 GMT

Beijing - China's currency hit a record high Monday as the central parity rate of the yuan was set at 6.6732 per dollar, according to official data.

Monday's central parity rate beat the previous record of 6.6830 on October 8.

The yuan has picked up strength against the dollar and seen increased volatility in trading since China's central bank announced it would increase exchange rate flexibility on June 19.

Based on Monday's rate, the Chinese currency has strengthened against the dollar by about 2.26 percent from the rate of 6.8275 per dollar set before the bank's pledge to increase flexibility.

On China's foreign exchange spot market, the yuan can rise or fall 0.5 per cent from the parity rate during trading each day.

China will continue to reform the mechanism of its currency exchange rate to improve flexibility, but will do so in a gradual way, Zhou Xiaochuan, governor of the central bank, said Sunday.

He said Westerners prefer Western medication methods that are quick but drastic, while Chinese people prefer traditional medication that is slower and needs time for different elements to take effect.

Managing China's currency issue is a 'complicated art,' which must consider domestic inflation, the unemployment rate, gross domestic product growth, the balance of payments and other factors, he said.

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