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CHINA NEWS
Last
updated August 2011
Yuan rises to 7.01 against
US dollar
- Yuan rises
to 7.01 against US dollar
(chinadaily.com.cn)
Updated: 2011-08-03
The yuan rose to the strongest since the dollar peg was
scrapped in 2005, as authorities seek a stronger currency
to curb inflation and lower foreign currency reserve build-up.
The People's Bank of China, the central bank, set the
central parity trading rate at 7.0130 yuan against the
greenback, from Wednesday's 7.0252. The yuan has gained
3.7 percent against the dollar since the beginning of
2008.
Analysts say it won't be many days before one US dollar
trades less than 7 yuan, a new milestone since China scraped
a fixed exchange rate system in July 2005.
Economists and policy-makers believe that a stronger yuan
will help reduce the country's massive trade surplus,
mop up excessive liquidity on the market, and effectively
curb domestic inflation, which rose to a 11-year high
of 8.7 percent in February.
"The need to ease inflation and cut the trade surplus
keeps pushing up the yuan,'' Hao Shufei, a foreign- exchange
trader at the Chinese unit of ABN Amro Bank NV in Shanghai,
was quoted as saying by the Bloomberg.
The yuan, which advanced 7 percent against the greenback
in 2007, gained the most in a week.
The recent quickening appreciation of the yuan seemingly
underscores the Chinese government's determination to
rein in big domestic prices rises. Some analysts said
that Beijing has resorted to two-pronged approaches to
fight inflation: rapid yuan revaluation and rein-in of
liquidity on the money market.
The central bank ordered the reserve ratio that commercial
banks are required to deposit in the central bank, be
raised to 15.5 percent, effective from March 25. The measure
is expected to recover 210 billion yuan from the market.
Others say that the latest acceleration in the rise of
the yuan might be the beginning of China's efforts to
narrow the trade imbalance while better meeting domestic
consumption with more imports
Oil
giants deny price rise rumors
(Xinhua)
Updated: 2011-08-03
BEIJING -- China's major oil suppliers denied rumors about
oil price rises, and blamed the rumors for the worsening fuel
supply shortfall that is spreading northward across the country.
High international oil prices have fuelled price rise prospects
in domestic market. Some producers and dealers started to
hoard oil amid the rumors, worsening the situation, China
National Petroleum Corporation (CNPC) and China Petroleum
and Chemical Corporation (Sinopec) jointly announced.
The shortage, first reported in southern China, now appears
to be spreading to the northern parts of the country.
Shanghai, the country's economic center, is now being affected,
with rationing, long queues and power-off filling machines
becoming common at filling stations.
The Shanghai Economic Commission said on its website that
the city has enough diesel to last more than 10 days.
CNPC and Sinopec emphasized that China had enough oil to ensure
a stable supply and the fuel-supply crises of the second half
of last year would not re-emerge.
According to the National Development and Reform Commission
(NDRC), China's top economy planner, refined oil output, mainly
produced by the two oil giants, surged 10.5 percent in the
first two months of this year. The stockpile rose 28 percent,
compared with the beginning of this year.
The two giants said the continuing reconstruction after the
snow havoc, and spring ploughing have also added more pressure
on the supply tension.
However, industry experts said that government-controlled
oil prices in domestic market has led to the shortfall, as
refineries cut back production to avoid losses while producers
and dealers hoard oil to gain more profits in the case of
possible price rises.
The CNPC and Sinopec said they would double efforts to increase
market supply and distribute more oil to the shortage-affected
regions.
They also suggested the authorities should punish those who
spread the rumors or hoarded oil.
China's consumer price index (CPI), the main inflation indicator,
rose 8.7 percent in February over the same time last year,
a 12-year high.
The NDRC raised the prices of gasoline, diesel oil and aviation
kerosene by 500 yuan per tonne in November, almost a 10 percent
rise, to narrow the gap between steep international crude
prices and state-set domestic oil prices.
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