Beijing set the reference rate for the yuan at a record high yesterday, one week ahead of an economic summit between the nation's top policymakers and their United States counterparts.
The People's Bank of China put the central parity rate at 6.2829 per US dollar yesterday, 0.15 per cent higher than Wednesday's 6.2923 per dollar, and the third straight increase.
On the China Foreign Exchange Trade System, the yuan rose as much as 0.09 per cent in intraday trading before slipping 0.03 per cent from a day earlier to end at 6.3060.
The central bank sets the reference rate each day and the value of the yuan can rise or fall as much as 1 per cent during the intraday day trading. The daily fixing, known as central parity rate, normally reflects Beijing's attitude towards the value of the currency after China lifted a peg to the US dollar in 2005.
'China is sending a friendly message to the US and other major economies that we don't want to see trade frictions,' said Yinshu Capital chairman Huang Feng. 'The reference rate is more a result of politics than economics.'
Vice-Premier Wang Qishan is due to meet US Treasury Secretary Timothy Geithner in the fourth round of a strategic and economic dialogue in Beijing next week.
Beijing, under pressure from US politicians to revalue the currency, has been gradually making the yuan stronger, a move that dented the mainland's export growth as Chinese-made products consequently became more expensive.