Yuan extends rally to new high against U.S. dollar
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The central parity rate of the yuan, China's currency Renminbi (RMB), jumped 113 basis points, or 0.17 percent, Tuesday to a new record high at US$6.6997 per, according to the data released by the China Foreign Exchange Trading System.
Tuesday's yuan central parity against U.S. dollar beat the previous record of 6.7110 per U.S. dollar on Monday and extended the Chinese currency's gains to eight consecutive trading days.
The yuan has picked up its strength against the U.S. dollars and seen increased volatility in the trading days since the People's Bank of China (PBOC), the central bank, announced on June 19 this year to increase exchange rate flexibility.
Based on Tuesday's central parity, the Chinese currency has strengthened against the U.S. dollar by 1.87 percent from the rate of 6.8275 per U.S. dollar that was set a day before the PBOC's pledge to increase flexibility.
On China's foreign exchange spot market, the yuan can rise or fall 0.5 percent from the central parity rate during trading each day.
According to Tuesday's central parity rates, the yuan's value strengthened against all the currencies within its basket with lower rates.
The PBOC released the yuan's central parity rates against a basket of currencies -- the U.S. dollar, the euro, the Japanese yen, the Hong Kong dollar, the British pound and the Malaysian Ringgit.
The yuan's parity rate against the euro was set by the central bank at 8.7522 Tuesday, lower from 8.7595 Monday.
The yuan's rate against 100 yen was 7.8204 Tuesday, compared with 7.8275 Monday.
The Chinese currency soared 814 basis points against the British pound with the central parity rate being set at 10.42 from Monday's 10.5014.
The central parity of RMB against the U.S. dollar is based on a weighted average of enquired prices from all market makers before the opening of the market in each business day.
The central parity of RMB against the other five currencies is based on the central rate of RMB against the U.S. dollar of the same business day as well as the exchange rates of the five currencies against the U.S. dollar at 9 a.m. (0100 GMT) of the same business day in the international foreign exchange market.
