China’s yuan rose to a 19-year high after the central bank raised its reference rate for the currency and a report indicated that manufacturing expanded in March at the fastest pace in 11 months.
The People’s Bank of China increased the currency’s fixing by 0.02 percent to 6.2674 per dollar, the strongest level since May 2012. China will work to stabilize economic growth and control inflation, Vice Premier Zhang Gaoli said March 29, according to a China National Radio report. An official Purchasing Managers’ Index was 50.9 in March, the highest since April 2012 and above the 50 level that represents the dividing line between growth and contraction.
“With Chinese growth recovering from last year’s slowdown and the PBOC shifting its concern toward inflation pressures, a stronger currency is one way to try to manage inflation,” said Khoon Goh, a senior strategist at Australia & New Zealand Banking Group Ltd. in Singapore. He predicts the yuan will rise to 6.10 per dollar by the end of 2013.
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