The People’s Bank of China fixed the yuan’s mid-point against the dollar at a historic 6.3972 today, beating yesterday’s record.
The Chinese currency has been appreciating rapidly this past week, marking the strongest gain in over three years as Chinese officials allowed for it to strengthen. A strong yuan though could be beneficial to global economic recovery as Chinese importers have more purchasing power to buy goods from the U.S. and Europe and help boost their sluggish economies.
China is the world’s second largest economy after the United States, and with a growing population of 1.3 billion, increasing imports could have a positive effect on global growth.
Recent data show that import demand is already surging. According to trade data released this week, imports rose 27 percent to a record $973 billion in the first seven months of 2011. While developed nations are struggling, the Chinese economy may expand more than 9 percent this year, according to economists forecast.