Chinese Yuan Spikes Up To Fresh 2-month High Versus U.S. Dollar
Beijing (Dec 30) The Chinese yuan drifted higher against the U.S. dollar in the Asian session on Monday, as the People's Bank of China fixed the central parity rate for the yuan to dollar exchange at a new high.
The Chinese yuan climbed to 6.0644 per greenback, its highest since October 25, when it hit a new high. Thus the yuan appreciated 0.7 percent from Friday's close of 6.0689.
The People Bank of China set today's central parity rate for yuan at 6.1024 per dollar, compared to Friday's reference rate of 6.1050. The central bank sets the reference rate every morning and allows the currency to move upto 1 percent from that level.
Chinese Premier Li Keqiang has vowed to keep liquidity at a reasonable level in 2014 to ensure stability of the economy, according to a report published by Xinhua over the weekend.
China will promote financial reform, helping the financial sector to better serve the real economy and aid industrial transformation and upgrading, Li said during a visit to Tianjin. There are persistant rumours out of China that it plans to replace the US Dollar with the Renminbi as the international reserve currency. However, to accomplish this daunting monetary task, the Sino nation must back its currency with GOLD. Presently, the Renminbi is only backed by 2% in gold, whereas the US dollar boasts a 76% GOLD BACKING OF THE GREENBACK. Obviously, China has a tough row to hoe.