| Yuan pricier than HK dollar for 1st time in 13 years |
SHANGHAI, Jan. 11 -- The yuan rose past the Hong Kong dollar for the first time in 13 years, underlining Chinese mainland's economic ascent and fueling debate over whether to scrap the city's exchange-rate link to the US dollar.
Yuan climbed to as much as 1.0001 per Hong Kong dollar, and advanced 0.14 percent to 7.7963 to the US currency at 13:21 pm in Shanghai, the biggest gain in six weeks, according to data compiled by Bloomberg.
Gains in the yuan may add to pressure on Hong Kong to adjust a 23-year-old currency peg to the dollar to reflect growing economic ties with the mainland. The Hong Kong Monetary Authority says any change would rock investor confidence and has spent the past three years stopping currency appreciation.
"Breaking 7.80 is psychologically impressive, but it's just a passing point or a passing ceremony,'' said C. H. Kwan, a Tokyo-based senior fellow at Nomura Institute of Capital Markets Research, a unit of Japan's biggest brokerage.
"The Hong Kong dollar is likely to remain pegged to the US dollar at a central rate of 7.80 in coming years," Kwan said.
As the HKMA held the Hong Kong dollar steady, the yuan, or renminbi, has advanced 5.8 percent since a decade-long dollar link of 8.3 was scrapped in July, 2005. Hong Kong's de-facto central bank prevents its currency from trading more than 5 cents either side of 7.80 per US dollar.
HKMA Chief Joseph Yam, who wasn't immediately available for comment today, said on August 25 that 7.80 was a "psychological level" that wouldn't play a role in setting currency policy.
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