Yuan rises to 19-year high over greenback

The yuan yesterday rose to a 19-year high against the US dollar after China's central bank set the daily fixing at the strongest level in two months on an improving outlook for Cyprus crisis solution.

The yuan closed in Shanghai at 6.2107 per US dollar after briefly touching 6.2096 in the morning, breaching the 6.21 level for the first time since China unified market and official exchange rates at the end of 1993.

The People's Bank of China yesterday raised the daily fixing by 0.03 percent to 6.2692 per dollar, the strongest level since January 15. The yuan is allowed to trade between 1 percent on each side of the daily fixing rate.

The yuan appreciated in line with the stronger currencies of Asia's developing economies yesterday as eurozone finance ministers approved a bailout for Cyprus. Analysts speculated demand for emerging market assets may rise after Cyprus secured a bailout deal.

''The yuan's appreciation reflects the stronger central parity rate set by the PBOC amid weakening of the US dollar in global markets, and improved risk appetite following hopes of a solution to the Cyprus crisis,'' said Dariusz Kowalczyk, senior economist at Credit Agricole.

He said China may also raise the exchange rate ahead of today's BRICS summit to show the country is making efforts to balance its assets and liabilities.

Leaders of Brazil, Russia, India, China and South Africa will meet today for the fifth annual summit in Durban, South Africa.

Chinese President Xi Jinping will attend the meeting.