China has set the guiding rate for the yuan at its highest yet, despite investors worldwide pushing the currency downward, the Wall Street Journal reports. The move points to China’s central bank’s resolve not to let global economic concerns foil its long upward push for the yuan, a shift which ups consumption, works against inflation, and could help turn the yuan into a more global currency.
The US has long urged China to let the yuan rise, with some lawmakers concerned that a lower yuan gives Chinese exporters an undue leg up. The decision to set the yuan’s reference rate against the dollar at 6.3735 before today’s trading is “a signal to the market that China will keep letting the yuan appreciate despite the risk aversion in the rest of the world,” says a Hong Kong economist. In short, the People’s Bank of China “doesn't want to see offshore sentiment affecting the domestic market,” notes another expert. (Read more China stories.)