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Yuan rises to record high against greenback

China’s yuan rose sharply against the US dollar on Wednesday after the Federal Reserve cut the federal funds rate by 75 basis points to ward off recession.

The central parity rate of the yuan, or Renminbi (RMB), jumped by 222 basis points to 7.0648 yuan against one US dollar, according to China Foreign Exchange Trading System.

The sharp rise pushed the RMB to the record high after it was depegged from the US dollar in July 2005. It has appreciated 3.4 percent so far this year after rising 6.9 percent last year.

Analysts said the faster appreciation came as US dollar was weak on recession fears and China wanted to use the appreciation to help curb inflation that rose by the nearly 12-year high of 8.7 percent in February.

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