RMB breaks 7.81 mark against U.S. dollar

The value of RMB against U.S. dollar hit a new high on the final trading day of 2006.

The central parity rate of RMB against U.S. dollar was set at 7.8087 yuan on Friday, breaking the 7.81 mark for the first time.

On the previous trading day, the central parity was set at 7.8149 yuan to one U.S. dollar, marking a further 3.78 percent gain since the initial appreciation on the reform of RMB exchange rate system.

The RMB successively breached the marks of 7.87, 7.86, 7.85, 7.84, 7.83 and 7.82 against the U.S. dollar during the past two months, showing a trend of accelerated appreciation.

Tan Yaling, finance expert with the Bank of China has attributed the recent appreciation of yuan to the weakness of U.S. dollar and profit-taking moves on the part of banks.

China's State Information Center has predicted a 3-4 percent appreciation in 2007, while the Bank of America and Deutsche Bank expected the RMB to rise 4-6 percent and 4.5 percent, respectively.

China raised the value of yuan by 2 percent to 8.11 per U.S. dollar and started linking it to a basket of currencies on July 21 of last year, and allowed it to move 0.3 percent above or below the parity rate against the U.S. dollar.

Source: Xinhua