Chinese yuan strengthens to three-month high

Beijing: The Chinese yuan on Friday strengthened to its highest level since December after the central bank raised its central parity rate.

The People's Bank of China on Friday raised the yuan's central parity rate, which restricts onshore moves to 2 percent on either side, by 0.51 percent to 6.4628, the highest level in three months, Xinhua news agency reported. The onshore yuan climbed to 6.4625 to the dollar as of 9.40 a.m. in Shanghai, up 214 basis points from Thursday's close, according to China Foreign Exchange Trade System prices.  The offshore yuan gained more than 200 basis points to 6.4443 a dollar. The hike in the yuan's exchange rate came after the US Federal Reserve kept its benchmark short-term interest rates unchanged and reduced the number of expected rate hikes this year, which triggered a slump in the US dollar. The yuan weakened against the dollar by 4.7 percent in 2015. However, Chinese authorities have repeatedly denied that there is any basis for continued weakness of the Chinese currency. Central bank governor Zhou Xiaochuan said earlier this month that the yuan had started to return to "a normal and reasonable level" after volatility.