|China's yuan hit an intraday high of 6.2371 per US dollar, the highest rate since 1994. (Photo/China.org)|
China's yuan advanced to its highest value against the US dollar in nearly 19 years yesterday, pushed up by quantitative easing worldwide and optimistic signs for China's economy.
The currency hit an intraday high of 6.2371 per US dollar, the highest rate since 1994, when the nation launched a new Chinese currency-trading system, before it closed at 6.2438 against the dollar.
The People's Bank of China set the central parity rate at 6.2992 against the dollar yesterday, marking the strongest trading midpoint since May 11, compared with last Friday's 6.3010.
The yuan, rebounding on its longest streak since 2008, has gained 2 percent since the end of July. Analysts attributed the appreciation to the cheaper dollar after a worldwide relaxation in monetary policy as well as the increasing inflow of speculative funds.
The yuan is not the only currency appreciating as excessive liquidity resulting from quantitative easing policies in the US and Europe has weakened the US dollar, said Zuo Xiaolei, chief economist of China Galaxy Securities. Intensified speculative investments amid increasing inflow of foreign capital also contributed, Zuo added.
China's foreign exchange purchases rose 130.68 billion yuan (US$20.7 billion) in September after falling for two months, the central bank said on October 19, indicating that more overseas funds flowed into the domestic Chinese market.
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