Yuan spot price hits record high

Another day of strengthening for the Chinese currency, the Renminbi spot rate against the US dollar hit the upper limit of the allowed moving range for a 12th consecutive trading session. The central bank set the yuan’s central parity rate versus the greenback at 6.2881, while the spot rate touched the ceiling of 6.2252 at the start of trading. This was the highest level since 1994 when China launched Renminbi exchange rate reform. The spot rate has increased over 2 and half a percent since mid-July. Analysts say the recent strengthening of the yuan is mainly due to hot money flowing into the Chinese economy. They also note the recent appreciating trend won’t ease in the short-term, but it won’t touch the 6.20 level within the year.