The Chinese yuan rose to the highest level Friday against the U.S. dollar since a Chinese currency revaluation in 2005 amid rising pressure from Washington and other major economies.
According to the central People's Bank of China, the yuan's central parity rate was set at 6.6497 against the greenback, up from 6.6582 the previous session. The rate was the highest since July 21, 2005, when China abandoned a decade-old peg against the U.S. dollar and shifted to a managed floating exchange rate with reference to a basket of currencies.
In 2008, however, the global financial crisis put a halt to China's foreign exchange rate reform. The Chinese central bank adopted the pegging policy of the yuan to the U.S. dollar once again. During the financial crisis, the yuan had been pegged at around 6.83 to the dollar.
The value of the Chinese yuan has been at the heart of the recent rows between the world's second-largest economy and other major economies.
The U.S. and the European Union have been turning up the heat on China to appreciate the yuan, blaming the undervalued Chinese currency for the burgeoning trade deficit and job cuts
in the U.S. and European countries.
China says any sharp appreciation of the yuan will jeopardize the Chinese economy and subsequently undermine the global economy already suffering from the worst recession in decades.
Some countries, such as Japan, have started to intervene in foreign exchange markets to keep their currency's value low after having exhausted other stimuli, including expansionary monetary and fiscal policies, since 2008.