The Chinese currency, yuan, rose to its highest in two years after China''s central
bank ended its dollar peg and allowed faster appreciation in a bid to narrow a
record trade surplus.
yuan rose to 7.4746 versus the dollar as of 1:57 p.m. in Shanghai, the biggest
gain since the peg ended in July 2005. The yuan is expectd to strengthen to 7.4
by the end of the year, according to analysts.
currency climbed 0.3 per cent against the dollar after the People''s Bank of China
set the strongest daily reference rate since the end of a fixed exchange rate
in July 2005.
record $185.7 billion trade surplus in the first nine months has flooded the economy
with cash, fuelling an 11.9 per cent annual rate of growth in the second quarter.
The central bank has raised interest rates five times this year, even as the Federal
Reserve reduces borrowing costs, after inflation accelerated to a 10-year high.