Yuan will appreciate further 3.1% by year end: Barcalys
(Xinhua)
Updated: 2006-07-24 16:27
China's yuan will appreciate a further 3.1 percent from its current level to
hit a high of 7.75 against the US 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 US 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.
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