Beijing (AsiaNews / Agencies) - The Central Bank of China today set a new higher value of the Yuan at 6.5781 against the U.S. dollar. According to analysts, the move indicates that the government is trying to appreciate the Chinese currency in a bid to fight inflation. In January, inflation in the country reached 4.9%.
The U.S. government is urging Beijing to appreciate its currency, artificially undervalued by at least 30%, to the benefit of Chinese exports. Yesterday, on the eve of the G20, the Governor of Central Bank of China, Zhou Xiaochuan, said that Beijing will decide the pace of appreciation of the Yuan according to their own forecasts, without being influenced by other countries.
Beijing fears that a rapid appreciation of its currency would curb its exports and employment in the country, creating more social tension. However, since July 2005, when China decided to break away from fixed exchange rate with the dollar, the Yuan has been appreciated by 26%.
Due to inflation, Chinese investors are feeling increasingly insecure and there is a growing demand for gold. In the first 10 months of 2010 the country imported over 209 tons of the precious metal. In 2009 it had imported only 45 tonnes