China’s currency hits three-year high against dollar
China’s currency hit its strongest level against the dollar in three years, posing a challenge for Beijing as it seeks to balance demand for the country’s exports with surging commodity prices.
The onshore-traded renminbi gained 0.2 per cent to reach Rmb6.4046 per greenback on Tuesday, its highest point since June 2018. Meanwhile, the country’s CSI 300 of Shanghai- and Shenzhen-listed shares enjoyed its best day since July, rising 3 per cent.
The renminbi has gained more than 10 per cent over the past year, buoyed by China’s economic rebound from the Covid-19 pandemic and foreign capital flows into the country.
But the currency’s rise is a quandary for policymakers in China as they grapple with the impact of rising commodity prices, the risk of asset bubbles and signs that growth may be losing steam. On a quarter-on-quarter basis GDP expanded just 0.6 per…