Foreign Exchange News
- Yuan predicted to climb
Date: 27-Mar-2007 Sources: (Xinhua Online)
The yuan is expected to move in a narrow range this week after the interest rate rise which sent the currency to new highs last week.
Analysts still predict that the yuan will keep climbing amid optimism as more interest rate rises are expected in the following quarters to rein in investment and rapid economic growth.
The Chinese currency closed 7.7280 against the US dollar on Friday, up from the 7.7360 a week earlier.
The yuan has gained 6.7 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 central bank on March 17 raised the benchmark one-year lending rate by 0.27 percentage points to 6.39 percent and lifted the one-year deposit rate by the same amount to 2.79 percent.
The weekend action was the central bank's third rate increase since last year as part of its effort to rein in liquidity, keep consumer prices stable and apply the brakes to the sizzling economy.
Analysts said the rise was another interim step along China's long march to curb bulging credit and fulfill its commitment to increase the flexibility of its currency.
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