China on Monday set its yuan exchange rate marginally higher following the Group of 20 summit, but analysts warned the shift was symbolic and did not presage a major revaluation of the currency.
The move by the Chinese central bank came after US President Barack Obama and other leaders used the weekend’s G20 meeting in Toronto to intensify pressure on Beijing to let the yuan strengthen.
The People’s Bank of China said it set the central parity rate — the centre point of the currency’s allowed trading band — at 6.7890 to the dollar, a fraction stronger than Friday’s 6.7896.
It was the strongest level policymakers have set since China unpegged the currency in July 2005 and moved to a tightly managed floating exchange rate.
China’s central bank pledged about a week ago to let the yuan trade more freely against the dollar but ruled out dramatic moves in the currency or a one-off appreciation.
Obama — facing angry lawmakers who want to slap China with sanctions for what they say is currency manipulation that has given it an unfair trade advantage — said Sunday he expected Beijing to “be serious” about its promise.
Brazilian finance minister Guido Mantega also urged China to let the unit strengthen more quickly. The action was widely seen as a bid to head off an ugly spat at the G20 meeting following months of intense pressure on Beijing.