The value of the Renminbi (RMB) yuan against the U.S. dollar hit a new high on Monday with a central parity rate of 7.7938 yuan to one dollar, according to the Chinese Foreign Exchange Trade System.

The new high follows a previous record of 7.7977 yuan to one dollar last Thursday, breaking the 7.8 mark for the first time.

Monday's exchange rate also marked a new high of 0.99945 yuan per Hong Kong dollar.

"The new appreciation of the RMB resulted from a temporary peak of personal foreign exchange settlements from overseas Chinese, such as students studying abroad, who remit money to relatives or friends in China as the traditional Spring Festival approaches," said Ye Yaoting, a forex analyst with the Bank of Communications.

China's growing trade surplus and foreign exchange reserves had contributed to boosting the yuan's appreciation, Ye said.

The trade surplus soared 74 percent to a record 177.47 billion U.S. dollars last year.

The foreign exchange reserve increased by 209 billion U.S. dollars in 2006, up 34.3 percent year-on-year, bringing the total to more than one trillion dollars.

The RMB has risen by nearly 4.06 percent since China's reform of the exchange rate system on July 21, 2005, which allowed the yuan to float against the U.S. dollar within a daily 0.3 percent band from the official central parity rate.

The State Information Center has predicted an appreciation of three to four percent this year, given the country's trade surplus and foreign exchange reserves are set to go on rising.

Source: Xinhua