The RMB hit a record high
vis-a-vis the US dollar on Monday. US Dollar traded for less than
RMB7.48, according to the Chinese Foreign Exchange Trading System after
falling through the watermark 7.50 rate last week. Further appreciation
is likely as the US dollar is also devaluing against most major
currencies.
In 2005, the Chinese government discontinued its
decade-long peg to the dollar, of RMB8.28. Since then, it has
appreciated by more than 10 per cent. The RMB broke the RMB7.6 mark
against the US dollar on 3 July this year, and further climbed to RMB7.5
on 24 Octobe. On Monday morning, the dollar cost less than RMB7.48
in Shanghai's trading session. The Chinese currency is still heavily
controlled by the government, but is allowed to fluctuate within rigid
boundaries.
The Chinese currency rate is very stable with the
Euro - a much stronger currency than the US dollar: the monthly average
in September was RMB10.4613, while the average for April was RMB10.4383.
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