The People's Bank of China set the mid-point of the yuan's exchange rate under 7.0 against the US dollar on Thursday.The Chinese yuan's exchange rate against the greenback broke the psychologically key 7.0 mark on Thursday. The central bank set the mid-point of the yuan's exchange rate at a post-revaluation high of 6.9920.
The acceleration of the yuan's appreciation has been partly due to the weakness of the dollar in global markets.Tan Yaling, Bank of China said "The depreciation of the US dollar triggered the rising of the renminbi's exchange rate. When the yuan broke the 8.0, 7.0 mark, it correlated with a quick fall in the US dollar's value."Industry insiders say the yuan's appreciation against the US dollar will hurt Chinese exports,especially the textile industry,their rate has decreased to 0.1 percent.
Tan Yaling said "The breaking of the 7.0 mark will put pressure on the Chinese economy. It will have a negative impact on many Chinese enterprises, especially exporters. The pressure and difficulties are obvious."The yuan has now appreciated 16 percent, since it was revalued in July 2005 and freed from a dollar peg to float within managed bands. The yuan's traded peak, since it was floated, is 7.0004, which was hit on Tuesday.
