Chinese yuan will appreciate further 3.1% by year end: Barcalys
Source: CCPIT TEX Date: 2006-07-25
It is reprted by Xinhua that China's yuan will appreciate a further 3.1 percent from its current level to hit a high of 7.75 against the U.S. dollar, Barclays Capital analysts said.
The yuan recorded a high of 7.9897 against the dollar last Friday, exactly one year after it was removed from its peg to the US currency.
A report from Barclays Capital, the investment banking arm of Britain's Barclays Bank Plc, the world's largest bank in terms of total assets, said China is expected to raise the flexibility of the yuan to 1.5 percent per day from 0.3 percent a day. Policies on the adjustment will be released by the end of September.
Huang Haizhou, head of Barclays Capital's expert team in China, said the increased fluctuation of China's yuan will bring more risks to Chinese enterprises in international trade.
Huang suggests the government should offer more guidance and proper financial products for local enterprises to avoid the increasing financial risks.
China is facing continued complaints from some U.S. companies that the yuan is undervalued by up to 40 percent, giving China's exporters an unfair price advantage and damaging foreign rivals.
The yuan has gained around 3.5 percent since July 21 last year,less than some daily movements of the dollar or Euro. Enditem
