The value of the Renminbi (RMB) yuan against the U.S. dollar hit a new high on Tuesday with a central parity rate of 7.7895 yuan to one dollar, according to the Chinese Foreign Exchange Trade System.

The new high follows a previous record of 7.7938 yuan to one dollar on Monday.

Tuesday's exchange rate also marked a new high of 0.99886 yuan to one Hong Kong dollar.

The value of the Renminbi (RMB) yuan overtook the HK dollar on Monday for the first time in history, with a central parity rate of 0.99945 yuan to one HK dollar.

Experts have ascribed the continuous appreciation of the RMB to China's growing trade surplus and foreign exchange reserves.

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

China's foreign exchange reserve reached 1.0663 trillion U.S. dollars at the end of 2006, announced the People's Bank of China on Monday.

The figure rose 30.22 percent over that at the end of 2005. And it was the first time that China's foreign exchange reserve exceeded one trillion U.S. dollars, according to the central bank.

A temporary peak of personal foreign exchange settlements from overseas Chinese also contributed to the appreciation of RMB, said forex analyst with the Bank of Communications.

The analyst said as the traditional Spring Festival, China's New Year, approaches, many overseas Chinese including students studying abroad began remitting money to relatives or friends in China.

The RMB has risen by more than 4 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