The latest move to tighten monetary policy is expected to help
pave the way for a faster appreciation of the yuan, dealers
said.
The yuan ended at 7.4030 on Friday, a rise of 5.43 percent this
year so far.
China will shift its monetary policy to a "tight" from a 10-year
"prudent" stance to fight inflation and curb credit to prevent
overheating from occurring, the central government said last week
at its annual central economic conference.
With the policy change, interest rate rises, higher bank reserve
requirement and the appreciation of the yuan are expected.
As central banks of other countries, including the United
States, are cutting interest rates, China is also reluctant to
raise its interest rates to avoid a capital influx into the
country.
(Shanghai Daily December 10, 2007)
