The Chinese yuan hit a new record high against US dollar on Monday ahead of the China-US Strategic and Economic Dialogue, the China Foreign Exchange Trading System said.
The central parity rate of the yuan advanced to CNY 6.4988 per US dollar, up 15 basis points from Friday’s 6.5003 to the greenback.
The People’s Bank of China fixes the central parity rate, an official reference for daily trading, every morning, and allows the currency to fluctuate up to 0.5 percent from the rate. Based on the central parity, yuan strengthened against the dollar.
The yuan first broke the symbolic 6.50 ratio against the US dollar on April 29, when it was set at 6.4990, according to state-run Xinhua News Agency.
The yuan exchange rate has risen by nearly 5 percent against the greenback since June 19 of last year, when the central bank announced that it would make its exchange rate formation mechanism more flexible.
As the two-day China-US Economic and Strategic Dialogue opens in Washington later in the day, it is expected the yuan exchange rate will be one of the issues on the agenda, said Xinhua.
American policymakers often argue that the Chinese currency is significantly undervalued, giving China’s exporters an unfair advantage.
Vice Finance Minister Zhu Guangyao said on May 6 that the exchange rate issue is a matter of China’s own economic sovereignty and China and the US remain divided on the specifics, stressing that Beijing believes the objective is to deepen exchange rate reforms, while Washington is focused on the range of the yuan’s appreciation.