The yuan strengthened beyond 6.6 per dollar for the first time since 1993 on speculation China will allow the currency to advance in an effort to tame inflation. The benchmark money-market rate hit a three-year high.
The renminbi climbed 0.5 percent in the past five days, headed for its fifth weekly gain, and reached the strongest level since China unified official and market exchange rates at the end of 1993. The yuan will continue to appreciate, advancing 6 percent next year, said David Cohen, an economist at Action Economics Ltd. in Singapore.
Policy makers “recognize the usefulness of a stronger currency in curbing inflation,” said Cohen. “The yuan, like other Asian currencies, has very strong fundamentals and the country has a very large current-account surplus.”