Moreover, although yuan revaluation has some bearing on inflation, tools such as interest rate, reserve requirement ratio and open market operations are what policymakers should use to curb inflation, said Lian Ping, chief economist of Bank of Communications, at a forum on Saturday.

Fast yuan appreciation would make things difficult for export-oriented manufacturers, analysts said, citing the closure of thousands of such companies in the coastal regions in recent months.

The central bank yesterday said it will continue its tight monetary policy this year in face of rising inflation risks.

(China Daily February 28, 2008)