China’s yuan rose to a 19-year high as the central bank boosted the currency’s reference rate and on speculation the government will further open the nation’s capital markets to offshore investors.
The People’s Bank of China strengthened the yuan’s daily fixing 0.04 percent to 6.1726 per dollar, after the Bloomberg Dollar Index lost 1 percent in the last three days. China should make monetary controls more coordinated and use multiple tools to ensure stable and moderate credit growth, according to a front-page commentary in today’s Financial News, which is published by the central bank. The nation will push forward with capital-account convertibility, the State Administration of Foreign Exchange said this week.
“The dollar is overall a bit weaker and continued yuan appreciation will help China to rebalance the economy,” said Patrick Bennett, a Hong Kong-based strategist at Canadian Imperial Bank of Commerce. “The internationalization of the yuan will need a balanced supply and demand as there’s still plenty of money that wants to go into China. We believe the yuan’s equilibrium is at a stronger level.”
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