Yuan Reference Rate Hits High

The People's Bank of China on Wednesday set the daily reference rate of the yuan against the dollar at 6.1980, the highest in 19 years since China unified the official and market exchange rates at the end of 1993.

Later, the yuan closed at 6.1410 against the dollar in Shanghai, according to the China Foreign Exchange Trade System. It touched 6.1396 earlier, the strongest level since the end of 1993.

The daily fixing of the yuan rose 1.41 percent since the beginning of the year against the dollar, as indicators show that capital flows into the world's second-largest economy accelerated in recent months.

The yuan is allowed to trade within 1 percent in each direction around the daily reference rate.

"Appreciation expectations and onshore demand for the currency still dominate the market as capital inflows continue, and the authorities are working to make the pricing of the yuan more flexible and market-oriented," said Guo Tianyong, a professor at the Central University of Finance and Economics in Beijing.