Banking News
- Yuan predicted for further gain
Date: 2-Apr-2007 Sources: (Xinhua Online)
The yuan is expected to hover within a narrow range this week following previous gains that enabled the currency to break new ground as the government fulfills its commitment to making the yuan more flexible.
In the middle to long-term, analysts and traders see further gains amid blistering economic performances and possible interest rate hikes to rein in excessive liquidity.
The Chinese currency closed 7.7302 against the U.S. dollar on Friday, slightly down from the 7.7280 a week earlier.
The yuan has gained 6.6 percent since July 2005, when China ended the peg of 8.28 yuan to the greenback and weighed it against a basket of currencies.
The Chinese economy advanced 10.7 percent and is expected to expand another 10 percent this year, according to a report by the Asian Development Bank on Tuesday.
Since trade surplus and heated investment remain a challenge for the economy, more policy tightening - such as another interest rate hike - will likely be seen in the coming quarters to curb the bulging credit, analysts said.
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