Stocks tumble amid bubble concerns
By Dong Zhixin (chinadaily.com.cn)Updated: 2007-02-02 16:03
RMB climbs to new high against the US dollar
In the currency trading, the yuan climbed to a new high of 7.7613 against the US dollar, the Xinhua News Agency reported.
On Thursday, the RMB broke the 7.77-yuan mark for the first time, ending the day's trading at 7.7615 yuan to the dollar. The rise of 161 basis points was the largest appreciation in a single day since China ended a peg to the US dollar.
"The sharp increase could have been due to the fact that the Federal Reserve announced it would continue to freeze interest rates and Wednesday's comments by the US Treasury Secretary Henry Paulson that the appreciation of the yuan should be accelerated," Xinhua quoted a anonymous forex trade dealer with the Bank of China.
However, Liu Yuhui, head of the economic evaluation center of the Research Institute of Finance under the Chinese Academy of Social Sciences, deemed the proximity of the rapid appreciation to Paulson's comments a mere coincidence.
"The upward trend of the value of the RMB has already taken shape. What happens in the outside world will not affect the overall movement of the local currency," Liu was quoted as saying. "Since the RMB broke the 8-yuan mark, it has been appreciating in a more active way."
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