China's yuan rose to the highest level against the US dollar in seven months on Tuesday after the central bank set a stronger reference rate for a fourth straight day.
Analysts attribute the hike to speculation on possible appreciation of the yuan as the country's economy starts to recover, as well as the weakening dollar.
he central bank set the dollar-yuan central parity rate at 6.8201 on Tuesday, the strongest since September. That's up 24 basis points from the previous trading day. China's purchasing managers' index for April rose for the fifth month in a row by more than one percentage point to 53.5. This reinforces growing confidence that the Chinese economy is starting to turn around.
But analysts predict that the space for further appreciation of the yuan is limited in the near future and the yuan's value may enter another round of adjustments.
(CCTV May 6, 2009)
