Yuan Kept Appreciating

In May, the Chinese central bank allowed the yuan exchange rate to float at a wider range-plus or minus 0.5 percent each day-from its previous range of 0.3 percent.

On December 14, the exchange rate of the U.S dollar against yuan was 7.3589. The yuan appreciated 5.7 percent this year, and it has appreciated 11.08 percent against the U.S. dollar since China reformed its exchange rate system in July 2005.

The yuan's daily permitted trading range had remained at 0.3 percent for two years. It is widely expected the range will be further widened next year.

Loosening on the yuan is an important step forward and lays a solid foundation for the currency's full convertibility.