RMB appreciation speeds up in 2008

The yuan has risen 0.7% against the US dollar since January 1, China Business Net reported (in Chinese). The intermediate rate has hit 7.2566 on Monday, breaking the 7.26 benchmark, the fifth time the Chinese currency has hit a record high against the dollar in 2008. A spokesperson from the central bank said that the yuan’s appreciation will help ease inflationary pressure. The remarks have been intepreted as government support for a more rapid rise of the exchange rate. Analysts project that appreciation against the dollar for the full year could reach 7-10% amid expectations of an interest rate cut by the US Federal Reserve and the continued weakening of the US currency.