China ratchets currency in bid to fight inflation

China’s currency appreciated beyond 6.5 per dollar for the first time since 1993, supporting speculation that the central bank will gradually strengthen the renminbi to help contain rampant inflation, BusinessWeek reported. The People’s Bank of China increased its reference rate for the renminbi 0.09% on Friday to RMB6.4990 per dollar. The move prompted an increase of 0.12% on the China Foreign Exchange Trade System to 6.4935 per dollar; China allows trades of the currency within 0.5% of the official rate, the report said. The increase caps off seven straight weeks of gains in the currency, its longest streak since July 2008. The “unusually fast pace” of appreciation confirms that China is using its currency to fight inflation, Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, wrote in a note on Friday. China’s consumer prices rose 5.4 percent from a year earlier in March, exceeding the government’s 4 percent goal for this year.