Chinese yuan refreshes 20-month high against USD

BEIJING - The central parity rate of the Chinese currency, the renminbi or the yuan, hit a new 20-month high against the US dollar on Friday.

The rate strengthened 128 basis points to 6.4915 against the US dollar Friday, according to the China Foreign Exchange Trade System.

This sets a new high since May 3, 2016, after the rate rallied to 6.492 on Wednesday.

Since the start of this year, the yuan's central parity rate strengthened 427 basis points against the greenback.

The yuan's onshore exchange rate strengthened by 6.72 percent last year, the sharpest annual appreciation in nine years, according to calculations by financial information provider Eastmoney.com.

The currency's robust performance was the result of a weaker dollar, sound economic fundamentals, improved regulation of capital flows, a relatively tightened monetary environment and increased global use of the currency.

The dollar index, which measures the greenback against six major peers, was down 0.29 percent at 91.899 in late trading Thursday.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.