China's yuan rose against the dollar on Monday after an official Chinese newspaper suggested that Beijing should further adjust the yuan exchange rate to keep policy in balance with the global economy.
The yuan closed at 7.9707 versus Friday's close of 7.9763, even though the central bank set the Chinese currency's daily mid-point at a slightly weaker 7.9719 on Monday morning compared to Friday's mid-point of 7.9715.
An official Chinese newspaper suggested the central bank should raise interest rates further and "adjust" the yuan exchange rate "if necessary".
"The central bank should adjust interest rates in a timely manner in the future and even adjust the exchange rate if necessary to help maintain a balance between domestic and global policies and the domestic and global economies," according to a front-page commentary published by the official Financial News.
The newspaper, published by the central bank, said interest rate rises were appropriate at a time when the gap between Chinese rates and those of other major economies had widened.
The yuan hit 7.9640 last Monday, its highest level since it was revalued by 2.1 percent and depegged from the dollar in July 2005. The high was hit after Beijing announced on August 18 it was raising interest rates for the second time in four months to curb rapid investment and credit growth.
Dealers said the launch of yuan futures and options on the Chicago Mercantile Exchange seemed to have no impact on spot trade of the Chinese currency in Shanghai on Monday.